John Doe' accuses ITEX Directors of Fraud, Securities Fraud, in cyber law case
PORTLAND, Ore.--(BUSINESS WIRE)--Aug. 30, 1999--In a responsive action dated August 26, 1999, in Multnomah County Circuit Court, ITEX Corporation (OTC:ITEX) and its directors were accused of fraud, securities fraud, and negligence in a cross-complaint filed by defendant Les L. French against ITEX and others.
French is suing for more than $1,000,000.00 in damages plus unspecified damages. The cross-complaint was filed in a case originally captioned as "ITEX Corporation v. John Does 1-100, and was included with French's answer and affirmative defenses.
"The 100 John Does" lawsuit is just the first of a series of cases in which citizens of this great land are using the responsive means available to them in the courts to combat fraud and misinformation being disseminated by these companies on the internet" stated French at a news conference on Friday. French claims that the internet provides an active medium in which stockholders of small cap companies can anonymously let directors know that their actions are being watched.
Other recent "John Doe" lawsuits include actions involving Total Renal (TRN), Wade Cook Financial Corporation (WADE), Raytheon (RTNB), Harbor Florida Bancshares (HARB), Phycor (PHYC), Phoenix (PHXX) Xircom (XIRC), and others, according to French, "who wish to place the interests of their respective companies over public interest concerns, and over the constitutionally protected freedoms guaranteed by the First Amendment." French alleges that many of these lawsuits are intended to have a "chilling effect" on the posters, with no real intention of going to trial. Many of these lawsuits arise from anonymous postings on Yahoo! Inc.'s (YHOO) popular finance message boards.
The cross-complaint alleges that the directors and others engaged in a conspiracy to fraudlently mislead investors, government agencies, and the public on matters regarding improper securities transactions, fraudulent financial reporting, and the solvency of ITEX and the barter exchange system that it manages. Part of the "conspiracy" was to "silence" knowledgable persons who sought to alert stockholders and the public about the ongoing fraud, using the internet and other means.
Named in the ITEX countersuit are Graham Norris, Sr.; Dr. Charles Padbury; Evan Ames; G. Dale Weight; Ronald Erickson; Sherry Meinberg; Robert Nelson; Mary Scherr; Joseph Morris; ITEX Corporation; and others.
French is a stockholder of ITEX, as well as a former vice-president during the company's formative years in the late 1980's. ITEX Corporation is an Oregon-based barter company.
Automated Business Corporation maintains internet sites in the public interest as a forum to discuss these and other issues:
Legal issues: lesfrench.com John Doe suits: clubs.yahoo.com ITEX lawsuit: clubs.yahoo.com
CONTACT:
Automated Business Corp.
Les L. French, 503/620-4884
barter@lesfrench.com
KEYWORD: OREGON
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