S.D. biotech sues over messages on Internet
uniontrib.com
By Penni Crabtree
UNION-TRIBUNE STAFF WRITER
February 3, 2001
Hollis-Eden Pharmaceuticals has joined the "cyber-smear" fray with a lawsuit that seeks to silence Internet message board critics.
Hollis-Eden, a San Diego biotech, filed a libel suit in San Diego Superior Court seeking unspecified damages against 11 participants who posted disparaging remarks about Hollis-Eden management on the popular Yahoo! message boards.
Dozens of companies across the nation have filed similar suits, fearing such postings by often anonymous critics would tarnish corporate reputations and drive down stock prices. Free speech advocates argue that the lawsuits are meant to quash dissent and strike at the First Amendment.
In its libel suit, Hollis-Eden alleges the defendants, named only by their screen aliases, could be disgruntled former employees and shareholders or people working with short sellers to manipulate the stock.
The anonymous message board participants accuse Hollis-Eden management, in colorful but intemperate language, of "dishonesty, deceit and fraud," of manipulating the stock for management's own gain, and of incompetence, according to the lawsuit.
Hollis-Eden alleges the slurs hurt its business and reputation. The company is seeking the true identities of the message board participants from Yahoo!, which is not named in the lawsuit.
The company, which posted a $21 million loss in the nine months ended Sept. 30, has an HIV drug in early-stage development. Its stock has fallen steadily from a 52-week high of $19.25 in March to yesterday's closing price of $5.09. |
