Re: 6/8/00 - Seitel will sue to stop negative Net chatter
June 8, 2000, 8:29PM
Seitel will sue to stop negative Net chatter
By JIM KENNETT
Copyright 2000 Houston Chronicle
A Houston oil-services company has grown tired of the anonymous chat-room prattle that has threatened the value of its stock, and the company's executives aren't going to take it anymore.
Seitel, which has the largest seismic data library in North America, will petition a Harris County District Court judge today to force the Internet company Yahoo to give up the names of certain visitors to a chat room focused on the company.
The visitors, according to Seitel President and Chief Executive Paul Frame, have been using the forum to criticize and spread lies about the company and it's directors.
"I don't want to offend anybody, but it's bar talk. They swear, they slander, they question," Frame said. "We're not opposed to a public forum at all, but we do believe there needs to be some governance of that forum so that people act in a responsible way."
Frame declined to say exactly what his company would do with the names if they get them, other than that they want to communicate with the chat-room visitors "and satisfy them."
Seitel's court appearance won't be the first time that the courts have outed individuals who thought they were safely hidden behind screen pseudonyms.
"It's actually been a really effective tool on the Internet to squelch free speech," said Robin Gross, staff attorney with the Electronic Frontier Foundation.
Yahoo operates one of the premier Internet domains. In addition to providing links to news, entertainment and other sources of information, it hosts numerous chat rooms, where those with Yahoo accounts can send messages on a given topic.
Many chat rooms concern a specific company, and one of those is Seitel.
As with many of its peers, Seitel's stock has been buffeted by the downturn in oil prices that began in late 1997 and continued through 1998.
Although oil prices are now sky-high, seismic companies typically are the last to recover after the oil cycle turns, and Seitel's stock continued to languish at 8 Thursday, down from a 52-week high of 17.
Late last year, as the stock approached its nadir, messages began flashing through the chat room criticizing the company. Issues included the large salaries and compensation paid to company executives and calls for their ouster, Seitel's accounting methods and the fate of a subsidiary that was spun off as a separate company, only to go bankrupt.
Often, criticism leveled on the Internet followed stories printed in the media, and since news of the court petition surfaced, the chat room's aficionados have grown concerned.
"I'm just a disgruntled shareholder," one said in an interview. "I don't think I said anything libelous. All I said is, `This company sucks.' ... All I said was what I thought, and that was my opinion."
The investor asked not to be identified but said he lost thousands of dollars on a company called Eagle Geophysical that Seitel spun off onto the open market in 1997 and that subsequently sought bankruptcy protection.
Some comments on the Web now refer to another Seitel subsidiary, DDD Energy, which the company is seeking to spin off. The company's initial public offering, however, has been delayed.
According to the petition filed with the court, Seitel is seeking the information in connection with "an anticipated suit."
Although Frame said the effort was aimed more toward opening lines of communication with disaffected stockholders, he made it clear that there could be ramifications for those who broke the law.
Stock bashers -- people who, because they have a financial interest in driving down a stock's price, post numerous negative comments in a company's chat room -- are common on the Internet, and securities laws forbid anyone posting false information aimed at moving a stock.
Frame also made it clear that things had gotten personal.
"I have a 15-and-a-half-year-old daughter who reads my chat board, and reads people saying things that are not true about her father and his company," Frame said. "That concerns me, that individuals have the right to do that without any checks."
Yahoo's privacy policy states that the company reserves the right to divulge the identities of its clients "when we believe in good faith that the law requires it," and a company spokesman said they "typically adhere to subpoenas."
Gross with the Electronic Frontier Foundation blamed Internet service providers for giving up the names of clients too easily and said claims that a person's anonymity creates an unfair environment have nothing to do with it.
"Anyone can speak anonymously," Gross said. "It's a constitutional right to be able to do that, and anyone walking through a public square with a ski mask on their face can say whatever they want. ... In many ways, that is being taken away from people on the Internet."
Another Internet lawyer, however, said that determining what is libel and what is truth is something often left up to a court. If a company feels its stock is being threatened, it's only recourse may be legal action to stop those it believes to be spreading false statements, said Dean Harvey, special counsel for the Internet and e-commerce at Vinson & Elkins.
To the guy who bought shares in Eagle Geophysical, however, it all sounds like a corporate power play.
"The thing that scares me is, this company has the financial muscle, right or wrong, to run me through the wringer," he said. "I lost money in Eagle Geophysical, and that's because I was screwed, and I can't say that in America?"
chron.com |
