Note to Patrick Byrne, CEO of Overstock.com: Read carefully please.

Note to readers: Check out Gary Weiss’s comments on this situation.

According to the Wall Street Journal, the Securities and Exchange Commission has opened an informal inquiry into the message board postings of Whole Foods Market Inc.’s CEO John Mackey. Mackey has allegedly been posting on Yahoo stock boards using a pseudonym for the last 8 years. His postings included pumping Whole Foods’ stock, praising the company’s financial results, and bashing a company Whole Foods wanted to acquire.

The SEC is likely to look into the accuracy of the comments, as well as whether or not Mackey selectively disclosed material corporate information. This disclosure could violate Regulation FD, which basically says that public company executives may not pick and choose who gets material information.

Message board posts are somewhat of untested waters yet. Message board activity has been going on for years, yet a definitive view of this activity under Regulation FD has yet to be developed.

The Wall Street Journal says the following about Mackey:

Mr. Mackey’s postings came to light as the Federal Trade Commission investigated the company’s planned acquisition of Wild Oats Markets Inc. On Wednesday, Whole Foods said that among millions of documents it gave to the FTC were Internet postings the CEO made from 1999 to 2006. Mr. Mackey used the pseudonym Rahodeb, a rendering of the name of the CEO’s wife, Deborah.

As Rahodeb, he made projections about Whole Foods’ performance that it appears weren’t disclosed to the markets. In 2006, for example, he noted that the company had recently projected it would post $12 billion in sales by 2010, then added: “won’t surprise me if the number ends up close to $14 billion.”

Patrick Byrne of Overstock.com has been known to post on a variety of message boards using screen names that do not make it clear who he is. From time-to-time he did sign postings with his real name and company affiliation, but there are plenty of instances in which he posted messages and did not identify himself.

I think one question yet to be answered is how much an executive should do to disclose his true identity in a message post. Should he be required to sign a message posted on a discussion board with his full name, company, and position? (I argue yes.) Or would it be sufficient enough to sign a post “Patrick” and assume readers know that means Patrick Byrne? (I argue no.) Would it be sufficient enough to not sign the post at all, but have a profile that indicates the poster’s name and company? (I argue no.)

The investing community shouldn’t have to decipher who is posting on a message board when it is a company executive posting about a public company. Plain and simple, the executive posting about his own company should be required to clearly identify himself on the face of the message so that any reader can easily determine that he is the source of the comments.

And of course the question remains whether executives of public companies should even be posting about those companies on message boards at all. Some argue that even posting on these boards amounts to selective disclosure of information, especially when some message boards require a paid membership to view the messages. It could be argued that everyone does not have equal access to such information.

More on Patrick Byrne’s antics at Sam Antar’s White Collar Fraud Blog.

Herb Greenberg’s comments can be found here.