Fooling Some of the People All of the Time, a Long Short (And Now Complete) Story, Updated With New by David Einhorn (tohfa e dulha read online TXT) 📕

large owner, was an effort to create upward pressure on that stock. The difference appears to be that saying something that makes a stock go up is unquestionably accepted, but the opposite is potential manipulation.

“I disagree with the second part of what you said. Definitely inform others.”

“Did you not anticipate that others, other fund managers and Wall Street types who were at this dinner, would short Allied in response to your presentation?”

“I would have thought that based on what I said at the conference, people would have looked into Allied, and I think given what I said and what I believed the facts to be that people very well could have decided to sell or sell short Allied . . . on the basis of the merits of the situation at the time.”

“Okay,” Braswell said. “Isn’t it a true statement that you had a reasonable expectation that other participants at that meeting would either short Allied based on the idea they heard from you or exit a long position?”

Then Hiler, Greenlight’s lawyer, interrupted. “I think he already testified to that. Now you’re asking him something that has ‘reasonable expectation’ in it and I don’t know if you’re trying to get at some legal standard or not, but he’s answered your question as to what he thought. People could decide that he’s all off base and buy more, too, once they heard him. So people could make their own decisions, and I don’t know what the ‘reasonable expectation’ standard is you’re trying to put on here.”

“Well, I’m not referring to a particular legal standard, Mr. Hiler, but I am asking the witness a different question,” Braswell responded.

“He said what his expectation was.”

“No,” Braswell said. “He said that other people might do their research.”

“Well, he didn’t—he didn’t adopt your answer. That may be the answer you want, but he did say what his answer was to your question of what did he expect people to do.”

This went on for a bit more until the SEC got into the issue of the active Blackberries during my speech.

“Mr. Einhorn,” Braswell said, “the record reflects from our investigation that there were people sitting at that dinner and as you spoke, they were on their Blackberries shorting Allied at that very moment.”

“Then they must have found what I said to be persuasive.”

“And did you have any anticipation that people would do that?”

“No. I heard those stories, too, and I was surprised when I heard that. I wouldn’t have expected people to be calling from the conference.”

“So in making this presentation,” Braswell asked a few minutes later, “you had no intent to try to convince the listener that your analysis was in fact correct?”

“I thought my analysis was correct. And I thought I gave an analysis that I thought was correct, and I attempted to tell people things that I thought were correct.”

“And so isn’t it reasonable to say that you intended to—”

At that point, Hiler had had enough.

“Look, I really think, if you want him to say he was trying to move the stock, he’s not going to say that,” Hiler said.

“No, that’s not what I’m asking him.”

“You’re going over this question six times. This witness has said that this was a charitable event that he was asked to attend and give an idea on a stock. He wanted to give a good idea, he said, because he felt people there deserved it because it’s a charitable event.

“He’s not saying he worked backwards from ‘let me intend to do this,’ and go forward to the speech. He’s told you as much as he can,” Hiler said. “‘I went in there to give them what I thought was a good idea and to give them my thoughts on that. They can decide whatever they want to decide.’ And that’s all.”

“I am not asking this witness to jump in the mind of anyone who was listening to that speech,” Braswell said. “I am simply trying to understand”

“He has told you what his intent was, what his purpose was, and what he did,” Hiler finished.

“Actually, Bruce, you’ve told me more of what his intent was than the witness has. And I would appreciate it if you wouldn’t testify.”

“I’m not testifying, but I do not want this witness badgered because this has been gone over six times,” Hiler said. “It’s obvious you want some answer you’re not getting, and I think we should be done with this topic.”

Braswell persisted, “Did you have any intent that your speech would have an effect on the market price of Allied securities?”

I answered, “That was not the purpose of the speech.”

“That was not the purpose. Did you have an intent?”

Now, I was confused, “What’s the difference between a purpose and an intent? . . . My intent was to do what the organizers of the charity asked me to do. . . .”

Then Braswell got back to the Blackberries.

“While you were giving the speech, did you witness people in the audience using their Blackberries?”

“I did not witness that, no.”

“When did you first hear that others had been trading Allied securities during the course of your speech?”

This wasn’t correct. My speech occurred after the close of trading. The Blackberry messages were requests to borrow shares in anticipation of shorting them the following day. I answered, “Some weeks later I had a meeting at Goldman Sachs and they told me that they were receiving questions during the meeting about the availability to borrow Allied shares, that that had happened during the meeting.”

Then suddenly we broke for lunch. I was dizzy and sick to my stomach. I felt that my testimony was not going well. Braswell was confrontational, and I didn’t know how many more arguments over the difference between purpose and intent I could stand. I was not looking forward to going back into that depressing room. They were hammering at me, and I knew I had to somehow get through the rest of the day and the following day. I had already made a mistake