Re: 8/30/00 [TTN] Titan sues to block damaging Web postings
Titan sues to block damaging Web postings
By Deena Beasley
LOS ANGELES, Aug 30 (Reuters) - Technology services firm Titan Corp. (NYSE: TTN) said on Wednesday it is suing a group of as yet unidentified short sellers it claims used Internet messages and written reports to drive down the company's stock price.
The suit comes only days after shares of high-tech company Emulex Corp (NASDAQ: EMLX). plunged more than 50 percent when a bogus press release was posted on the Web claiming its chief executive was resigning and it was being forced to revise earnings reports.
The Emulex hoax has triggered a fierce debate by investors and regulators over the Internet's role in stock trading and disseminating information.
San Diego-based Titan's suit, filed with California Superior Court in Los Angeles County, seeks damages and an injunction against further securities manipulation.
Titan said that in response to its suit, the court had issued a subpoena asking Internet portal operator Yahoo Inc (NASDAQ: YHOO) to turn over its records showing the identity of the individuals who posted messages.
"If this isn't the first time a subpeona has been issued to a Web site, it certainly won't be the last. The Internet provides a new arena in which securities law enforcement is required," said Marshall Grossman, an attorney at Los Angeles firm, Alschuler Grossman Stein & Kahan which is handling Titan's case.
"This lawsuit is being brought against those who created and disseminated false information about Titan while at the same time selling the stock or engaging in put transactions intended to drive the price of Titan's stock down," he said.
Titan, a defense contractor which has sought to reinvent itself by serving a range of private sector technology needs, said a scheme employing anonymous messages on Internet bulletin boards drove the price of its stock to $21 a share on Aug. 22 from $44-3/4 on May 1.
The stock closed up $1-1/2 at $24 on the New York Stock Exchange on Wednesday.
Grossman said material from one an anonymously written report, which was widely distributed to Titan's institutional shareholders, was also used in an article earlier this month in financial publication Barron's that further drove the company's stock price down.
The Barron's article suggested Titan's stock was overvalued due to uncertainty over whether its SureBeam business, which developed part of the Star Wars anti-missile defense system and is now used to help sterilize some foods, will be successful amid consumer resistance to irradiated foods.
"Titan has drawn a line in the sand. We will protect the interest of our shareholders. Titan will not tolerate irresponsible and illegal manipulation of its stock," Chairman Gene Ray said in a statement.
The company said its own investigation has identified about three dozen screen names used to spread the false information over the Internet.
siliconinvestor.com
Similar story from the San Diego Union-Tribune:
uniontrib.com |
