Addendum: the Witt Soundview report bears two names as purported authors: Kevin Slocum and Charles Gawlak.
Although the words "we believe" appear in several of the most critical sentences in the Witt report, nevertheless if the report turns out to be untrue it would be, in my opinion a libel of Stratos. Mere rote repetition of words suggesting "belief" about defamatory facts which are not true is not a safe harbor from liability for slander or libel. At best, the issue becomes one for the jury.
If this is the case, and the Witt report's defamatory statements about Stratos are untrue, STLW has a duty to its shareholders to take appropriate legal action against Witt and other responsible parties. Moreover, if the report's negative statements about Stratos are untrue, the surrounding circumstances, including the timing of the report's release, should be thoroughly investigated by the S.E.C. STLW has been a very heavily shorted stock due to the usual arbitrage stemming from the pending spin-off of remaining shares by Methode Electronics. If Witt was acting in behalf of, or based on false information supplied by, an arbitrageur or any other interests who stood to gain (or avoid loss) by the release of false or misleading information precisely at a time when those losses might be prevented by releasing false information, this might well violate S.E.C. regulations protecting against stock manipulation and fraud.
On the other hand, of course, if the negative assertions of fact referred to in the Witt report prove to be accurate, the shoe is on the other foot and shareholders can and probably should take legal action against Stratos' directors and management. So, either way one looks at it, it's time to bring in the lawyers. |
