After founding Rocker Partners in 1985, Rocker built the firm into one of the largest hedge funds specializing in short selling.

However, in 2005, Rocker Partners netted 46%, and total assets rose to $1.3 billion.

Rocker Partners is now incorporated as Copper River Management, LLC.

Overstock said that Rocker Partners, a hedge fund, drove down Overstock's stock price to reap a profit on a bet the shares would fall.

But a closer look reveals trouble, said one short-seller, M. W. Montgomery, general partner at Rocker Partners.

Mr. Jacobs added that he had subsequently called Rocker Partners and had apologized for his role in attacking the firm.

America Online, a favorite target of Rocker Partners in 1995 and 1996, was a prime example.

Rocker Partners has long had a reputation as one of the more aggressive short sellers around.

Indeed, his lawsuit against Rocker Partners has nothing at all to do with naked short selling.

(Rocker Partners and Gradient are aggressively defending against the Overstock lawsuit.)