O.co 'naked short selling' suit vs. Goldman, Merrill set for trial
Salt Lake City-based O.co said Monday its lawsuit over so-called naked short selling against Goldman Sachs and Bank of America subsidiary Merrill Lynch is scheduled to go to trial March 5.
The lawsuit, filed in 2007 in San Francisco, alleges the two companies engaged in share manipulation using the naked short selling practice to drive down O.co's (formerly Overstock.com) share price.
The companies dispute the allegations.
The practice is considered illegal because it allows manipulators a chance to force stock prices down without regard for normal stock supply/demand patterns.
"We believe that Goldman and Merrill manipulated the price of our shares," Chairman and O.co CEO Patrick Byrne said in a statement. "As we expect to show in this case, their illegal actions were designed to, and did, make them billions of dollars."