UBS to SUE Vancouver Sun, David Baines
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Unique Broadband Systems Inc - Street Wire
Unique Broadband launches Sun defamation suit
Unique Broadband Systems Inc
UBS
Shares issued 87,765,779
2000-11-21 close $1.92
Tuesday Nov 21 2000
Street Wire
by Brent Mudry
Unique Broadband Systems, its president Alex Dolgonos, and its chief financial
officer Stephen Rosen have filed notice of an intended defamation suit against The
Vancouver Sun and reporter David Baines over an unflattering Nov. 8 article which
focused on heavy insider-linked selling of shares of Unique Broadband Systems, a
leading stock on the Canadian Venture Exchange.
Besides taking issue with the reporting of insider-related share trading, Unique
Broadband, Mr. Dolgonos and Mr. Rosen are believed to be extremely upset with the
characterizations of their backgrounds and the company's Russian connections,
especially in the aftermath of the YBM International Magnex scandal.
In an endorsed writ of summons filed Monday in the Supreme Court of British
Columbia, the plaintiffs seek general, aggravated and punitive damages for
"defamatory statements, falsehoods and imputations regarding, and injurious to, the
plaintiffs." Vancouver lawyer Stephen Fitterman of Shapray Cramer & Associates told
Stockwatch he expects to file a detailed statement of claim within the next few
weeks.
The named defendants are The Sun's parent, Southam Inc., and Mr. Baines. The
lawsuit allegations have not yet been proven and no statements of defence have yet
been filed.
The suit was filed the same day The Sun ran a follow-up story clarifying its original
piece, noting that Mr. Dolgonos and his wife, Tina Livchits, did not breach British
Columbia securities rules by not filing advance notices of private transfers of five
million Unique Broadband shares.
In its clarification story, The Sun noted it had relied on misinformation provided by the
British Columbia Securities Commission in the newspaper's original suggestion that
B.C. securities law had been breached as no notices of intent to sell had been filed.
"Dean Pelkey, media relations officer for the B.C. Securities Commission, earlier told
The Sun there are 'no exemptions' from filing these forms. On this basis, The Sun
incorrectly concluded in a Nov. 8 story in the business section that Dolgonos and his
wife had breached securities rules by not filing advance notices. Commission officials
have since advised there was no breach in B.C. because both share dispositions
occurred outside the jurisdiction, beyond the purview of B.C. regulators," stated Mr.
Baines in the Monday article.
The next day, Tuesday, Nov. 21, The Sun followed by running a "Setting It Straight"
apology in its front section, on page A2. "A story and headline published Nov. 8,
2000, erroneously suggested that Alex Dolgonos, the president of Unique Broadband,
had contravened B.C. securities law by failing to file notice of his intention to transfer
shares to an offshore spousal trust or notice of the trust's subsequent sale of five
million shares. In fact, no advance notice was legally required for either transaction.
We apologize to Mr. Dolgonos for this error," stated The Sun.
While Mr. Fitterman, the lawyer for Unique, Mr. Dolgonos and Mr. Rosen, was not
able to comment on The Sun's Tuesday apology, as he had not yet reviewed it, he
notes that his clients are concerned about much broader issues than just the
intent-to-sell cases.
Mr. Fitterman notes that in the Monday article, Mr. Baines "appears to acknowledge
he was wrong" on the intent filings, but he placed the responsibility for the mistake on
the media relations officer of the BCSC.
"Also, the question of innuendo arises from the references to the company's
connections to Russia ... (and) innuendo arises from the manner in which the
backgrounds were described of Mr. Dolgonos and Mr. Rosen," Mr. Fitterman told
Stockwatch.
The original Sun article noted that Mr. Dolgonos, 37, was born in the former Soviet
Union and emigrated to Canada in 1989. "The company has a strong Russian
connection. It has an office in St. Petersburg and has several dozen employees of
Russian descent, some of whom recently emigrated to Canada," stated the article.
The piece made no further reference to the Russian connection.
While the Sun article made no mention of YBM or criminal suggestions, Unique
appears to be concerned about this perceived innuendo.
"There is certainly a scenario in Ontario with the Ontario Securities Commission
concerned about investigations into criminal elements in Russia, with YBM Magnex
...," says Mr. Fitterman. (It is unclear at this point how Unique will demonstrate this
negative innuendo about Russia, as the country also has a number of positives,
including a highly-sought-out legion of well-trained computer programmers, computer
experts, engineers, technicians and scientists.)
Mr. Fitterman says that in the context of the whole of the article, the innuendo that
can be inferred by an ordinary reader is that possibly there is "some involvement with
the criminal element in Russia." "I think it appears as a smear," he says.
The Unique Broadband lawyer also notes that his clients take offence at the
professional portrayals of Mr. Dolgonos and Mr. Rosen in the Sun article.
"Dolgonos's post-secondary education consists of a one-year diploma course in
electronic engineering at the Radio College of Canada in Toronto. He is said to be the
mastermind of the company's technology," stated The Sun.
"The company's vice-president and chief financial officer is Stephen Rosen, also of
Thornhill. He is a former chartered accountant who was involved in developing tax
shelter plans for real estate and film companies. In 1992, he relinquished his CA
designation after a failed dinner-theatre business forced him into bankruptcy," stated
The Sun.
"It is derogatory," says Mr. Fitterman. "For all Mr. Baines doesn't know those two
men could be thought of as very bright, competent and successful executives" in the
Toronto area, says the lawyer.
"They have been personally harmed as a result of this article," he says.
The suit is also expected to take issue with the description of insider-related stock
sales. "The article also states Ms. Livchits sold $20-million of stock. The stock was
sold by the trust. She may be the beneficiary of the trust," but she herself did not sell
the shares, says Mr. Fitterman.
Full details of the suit will not be known until the statement of claim is filed.
"They will be seeking substantial damages," says Mr. Fitterman.
(c) Copyright 2000 Canjex Publishing Ltd. canada-stockwatch.com
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Stick it to 'em, UBS. Baines truly is bias. |
