Let's see what Judge Pechman (U.S. DISTRICT COURT JUDGE)thought of Floyd Schneider and Stephan Worthington:
Gray Cary Obtains First-of-its-Kind
Retraction Order Against Cybersmearing Defendant
(SAN DIEGO, CA) February 7, 2000***Sounding the warning bell to internet market manipulators, Gray Cary successfully obtained a first of its kind restraining and retraction order from a San Diego Court against defendant Floyd D. Schneider (aka The Trusthseeker, Crims Thieves, and Floydie).
Schneider had been sued by plaintiff Bryant Cragun in San Diego Superior Court for unfair, deceptive, and unlawful business practices. Cragun alleges that Schneider has embarked on an extensive campaign of false and derogatory internet postings against Cragun, his family, and several companies with which he is affiliated. According to Cragun?s application for a restraining order, Schneider recently escalated his practices by issuing a series of false press releases designed to deceive investors into avoiding stocks affiliated with Cragun. Bryant Cragun is represented by Daniel T. Pascucci and Timothy S. Blackford of Gray Cary.
On January 31st, the San Diego Superior Court, Judge Janis Sammartino, shut down Schneider?s practices with a strict restraining order and ordered Schneider to post a retraction press release.
According to Judge Sammartino?s order, Schneider is enjoined ?from publishing, whether electronically, in writing, orally or otherwise, any statements about plaintiff Bryant Cragun or plaintiff?s family that state, suggest or imply that plaintiff or his family are disreputable, dishonest, unscrupulous, or have engaged in criminal behavior or any other false or defamatory statements about plaintiff or plaintiff?s family.? Judge Sammartino also enjoined Schneider from making similar statements about businesses affiliated with Cragun or from issuing certain press releases without clarifying that they are not authorized or issued by Cragun or a company affiliated with Cragun.
While the issuance of a restraining order to stop cybersmear market manipulation is novel in itself, the court further issued a retraction order, compelling Schneider to publish a retraction press release on the business wire of yahoo.com, siliconinvestor.com, ragingbull.com, and the Financial Web, as well as posting the retraction on Schneider?s own website, thetrusthseeker.com, for at least seven days. Under the ordered retraction language, Schneider must inform readers that the sell recommendations he previously announced, were ?not based on an objective analysis,? and that ?the derogatory statements made regarding Bryant Cragun, ZiaSun [Technologies, Inc.] and the officers, directors and employees of ZiaSun were false or implied false facts.?
According to Cragun, the order was worth the wait: ?This defendant has been publishing lies about me, my family, and the companies I do business with for months,? said Cragun. ?He hid behind a false name and a trail of false addresses and thought he could defame us and manipulate stocks with impunity. We caught him and have now brought his conduct to light. It is very rewarding to finally have the opportunity to set the record straight and to see that the courts won?t tolerate this manipulation.?
The court?s retraction order was the first of its kind in the country. Cragun?s attorneys hope the retraction order will deter future internet abuses to manipulate stock markets. ?This order should serve as a warning bell to those who would use the Internet for unlawful practices,? said Cragun?s attorney, Daniel Pascucci of Gray Cary Ware & Freidenrich. ?These defendants think that because the Internet has outpaced the law, it gives them a blank check, but there are ways to shut down these egregious practices even under the current law. This order was just the beginning.?
According to thestreet.com, when reached for a comment on the order, Schneider stated only that he would comply with the court?s order.
Gray Cary Ware & Freidenrich LLP is a law firm specializing in the representation of emerging growth and high technology companies, with over 360 attorneys practicing firm-wide in Palo Alto, San Diego, San Francisco, Sacramento and Austin. Clients include public and private companies, at all stages of growth from start-up to Fortune 500.
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