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The Satterwhite Stunt: The SEC Filings as Political Satire?

June 19, 2011

On June 2, a 51-year-old unknown from Killeen, Texas, by the name of Johnny Earl Satterwhite quietly submitted a Form 3 insider filing with the SEC. In the document, he reported the purchase of $100 million in Goldman Sachs Trust stock — attaining 10%+ beneficial owner status in the fund.

No one at Goldman Sachs had ever heard of Johnny Earl Satterwhite.

In the two weeks that followed, Satterwhite submitted over 60 insider filings with the SEC.  He reported holdings of literally trillions of dollars in some of the largest companies in the U.S., including Microsoft and Exxon Mobil.  Satterwhite’s claimed shares of Microsoft, as one report noted, eclipsed that of Bill Gates himself by a factor of 1,500 to 1.  In the same news story, a legal expert concluded that the filings “look like a practical joke”–and indeed the SEC has pulled them from their site (though they are still available on our SEC Filings page).

Not noted by press reports were details of the final filing in the series before the plug was pulled.  Submitted June 15, it was the first time Satterwhite did not claim insider status in another company; rather, it was a a Form D Exempt Offering, reporting a private offering of “indefinite” size of which $25 million had already been sold.  Satterwhite claimed to be associated with an unregistered private equity fund with over $100 million in revenue.  The security type was debt, the minimum investment a cool $25 million.

Using the knowledgemosaic Form D search page, we looked at the offering in the context of others with a similar profile: debt securities being peddled by private equity funds.  In all, there were 36.  Here’s how the Satterwhite offering stacked up against the other 35 in a few noteworthy areas:

  • Sales commissions claimed:  $25 million — Rank 1st
  • Finders’ fees claimed: $25 million — Rank: 1st
  • Amount paid to officers/directors: $5 million — Rank: 2nd

So what to make of this?  News reports suggest that Satterwhite acted as proxy for a group that apparently had a political axe to grind.  Yet the identity of the group, and indeed the statement they were trying to make, remains obscure.  The filings themselves seem to offer little clue.  But maybe — just maybe — that’s where the final Form D stands out.

Let’s do some quick math.  We see that the offering represents a bloated $55 million payday for shadowy investors whose enterprise is to pass on mountains of debt.  Think about that for a moment, especially in the context of recent U.S. economic policy.  And now recall how satire operates: whatever attributes of an object of social critique are perceived as grotesque or hypocritical or offensive are merely rendered all the more so by being ratcheted up a notch or two.  It worked for Jonathan Swift. It works for Stephen Colbert.  Maybe the Satterwhite stunt, had it been allowed to continue, would have likewise proven to be something more than a random, elaborate prank.

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