SALT LAKE CITY, Jan. 10, 2012 /PRNewswire/ -- Overstock.com (NASDAQ: OSTK) today announced that the California court in its prime broker lawsuit granted the defendants' motion for summary judgment.

(Logo: http://photos.prnewswire.com/prnh/20120110/LA33954LOGO)

"Obviously, we are disappointed with the court's ruling, which was not on the merits of the claims, but on a narrow interpretation of California law having to do with whether this conduct took place in California," said Jonathan Johnson, President of Overstock.com. "We believe the court is wrong. We presented more than enough 'in California' evidence to keep this case on a track to trial. So we will appeal. Because the defendants have admitted their conduct took place outside of California, we intend to file suit in another state. We will also continue to try to unseal the pleadings in this case so that the public and press can review the underlying facts - and make their own determination whether Goldman and Merrill manipulated the market in our stock."

Patrick Byrne, Chairman and CEO of Overstock.com, stated, "This is a setback, but we have always said we are in this case for the long haul. Until at least twelve Americans have had a chance to issue their own ruling on these facts, we will carry on."

At hearing, last Thursday, counsel for Overstock.com reviewed Defendant's extensive "in California" conduct including evidence showing:


    --  A large percentage of the trades that were part of the manipulative
        scheme, both equities and options, were effected by all Defendants on
        the Pacific Coast Stock Exchange, which was located in San Francisco.
    --  Merrill Lynch Professional Clearing Corporation's San Francisco office
        played a significant role in the fraud.  The head of that office
        actively worked with Merrill's senior management to create the policies
        and procedures to further the conduct, communicated five to six times a
        week with one of the lead traders involved in the manipulative naked
        short-selling of millions of shares of Overstock.com,  financed the
        manipulative trades,  prearranged with the trader a plan to allow the
        trader to fail (not settle) all its Overstock trades,  and also worked
        with clients to avoid being forced to settle naked short-selling
        transactions thorough "wash" or "matched" trades.
    --  Goldman Sachs purchased a type of "conversion trades" that were part of
        the manipulative scheme which were cleared by Merrill Lynch Professional
        Clearing Corporation in San Francisco, and which trades were effected on
        the Pacific Coast Stock Exchange in San Francisco.

Five years ago Overstock.com filed this case against major prime brokerage firms alleging manipulation of its stock through illegal naked short selling schemes and later narrowed the focus of the case to the remaining defendants, Goldman Sachs and Merrill Lynch entities.

Three times, at the request of the Securities and Exchange Commission, Overstock.com has provided to the SEC subpoenaed documents uncovered in the course of the case which show the manipulative conduct at issue in the case.

In May 2011, the same California court disallowed the company's amended complaint which would have added to the case a claim under New Jersey's RICO statute. The court ruled that conflict of law principles disallowed the trial of the New Jersey RICO claims in California courts. The company noted at the time its belief that the ruling was incorrect and now confirms that it will also appeal the RICO ruling.

About Overstock.com

Overstock.com is Your Savings Engine offering brand-name products. The company offers its customers an opportunity to shop for bargains conveniently, while offering its suppliers an alternative inventory distribution channel. Overstock.com, headquartered in Salt Lake City, is a publicly traded company listed on the NASDAQ Global Market System and can be found online at http://www.overstock.com and http://www.o.co. Overstock.com regularly posts information about the company and other related matters on its website under the heading "Investor Relations."

Overstock.com® is a registered trademark of Overstock.com, Inc. and Your Savings Engine(TM) is a trademark of Overstock.com, Inc.

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, statements regarding the legal ruling and the future of this and any subsequent case. Our Form 10-K for the year ended December 31, 2010, our subsequent quarterly reports on Form 10-Q, or any amendments thereto, and our other subsequent filings with the Securities and Exchange Commission identify important factors that could cause our actual results to differ materially from those contained in our projections, estimates or forward-looking statements.

SOURCE Overstock.com