interactive.wsj.com
December 22, 2000
Big Board Lawsuit Uncovers
Gahary as Online Impostor
By AARON ELSTEIN
WSJ.COM
Most people would be alarmed by a lawsuit from the New York Stock
Exchange. But David Gahary couldn't be more pleased.
Turns out Mr. Gahary is the impostor the
Big Board was seeking when it filed suit in
August to find out who was posing as the
exchange's chairman, Richard Grasso, in
postings on an Internet message board.
Mr. Gahary is best known for buying radio time and publishing an online
newsletter called WallStreetJovial.com to express his unorthodox and
unsubstantiated view that the Wall Street establishment conspires to
defraud small investors.
He denies the exchange's claims that his postings disparaged the exchange
and Mr. Grasso. In an answer to the exchange's suit filed this week in
federal court in Manhattan, he says he posted using Mr. Grasso's name
"for the purposes of parody."
"I am ready, willing, and more than able to fight this suit," says Mr. Gahary,
a 40-year-old resident of Neptune, N.J. "It is important to show the world
what a fraud the stock exchange has been since its founding in 1792 and
how the game of Wall Street has forever been rigged against the little guy. I
guess this is something I've been waiting for."
A spokesman for the exchange declined to comment about those remarks,
but said the exchange will continue to pursue its suit now that Mr. Gahary
has been identified.
Stock exchange officials didn't know they would be prosecuting Mr.
Gahary when they filed suit in August. The exchange learned of his identity
after serving a subpoena to America Online Inc., the Internet service
provider Mr. Gahary was using when he sent the offending messages to
Raging Bull, a popular message-board community, according to Mr.
Gahary's lawyer.
The suit names two other defendants, but Agnes McKeon, who represents
Mr. Gahary, says her client takes full responsibility for all postings using the
name Richard Grasso and any variations.
The exchange's suit alleges that the chairman's name was used online to
fool others. In one posting, Mr. Gahary, posing as Mr. Grasso, wrote to a
person with whom he disagreed: "You must really be in pain, associating so
closely with this soon-to-be revealed fraud of a company, since you
revealed your ignorance so quickly and absolutely."
The exchange says in its suit that it suffered "great damage to its business,
goodwill, reputation, and profits" as a result of these postings. It seeks
unspecified damages.
Mr. Gahary makes clear his views about Mr. Grasso and Wall Street on
his Web site, WallStreetJovial.com, a newsletter that has gained something
of a cult following. "This isn't a real or fair stock market," says the site's
front page. "It's dominated and exploited by people you don't see on
CNBC. A sophisticated underground network operates below your radar
screen and pulls the trap door lever to collect your cash. You are their
food. ... We're outsiders. We don't want into the system. We want it
rebuilt. We hate bullies. We defend the innocent."
Mr. Gahary comes about his unusual views after working a few years in
the securities business. He worked with Prudential Insurance Co. of
America from 1992 to 1994 and then American Capital Corp. until 1997,
according to the National Association of Securities Dealers. Since then, it's
been his mission to "educate people about how Wall Street really works,"
he says.
Mr. Gahary found a kindred spirit in Harvey Houtkin, who together pay
for time on a small radio station in New York's Queens borough to
broadcast their views.
Mr. Houtkin, author of the book, "Secrets of the SOES Bandit," gained
attention for promoting online trading as a way to invest while minimizing
the profits of Wall Street firms. (SOES refers to the Nasdaq Stock
Market's Small Order Execution System, which automatically and quickly
fills orders for small amounts of stock.) Mr. Houtkin was charged earlier
this by the NASD with making misleading statements in ads about the ease
with which investors could make money day trading. The case is pending.
Mr. Gahary says he eagerly awaits his day in court so he can face the
representatives of the stock exchange.
Write to Aaron Elstein at: aaron.elstein@wsj.com |
