Part II....continuation of Presstek lawsuit for libel against shorts!
MARK HOLLINGSWORTH a/k/a "Domcap" a/k/a "NNNot"
53. Defendant Hollingsworth repeatedly used the Internet and television to disparage and make knowingly false and misleading representations about Presstek. He engaged in dialogue on bulletin boards with himself pretending to be several different people by using different aliases thereby giving apparent credibility to his knowingly false statements. He also directly contacted major Presstek stockholders as well as its sole stock analyst and made knowingly false statements about the Company in an effort to drive down the price of the stock
54. On November 11, 1996, defendant Mark Hollingsworth using the alias "NNNot", announced "I do hate this stock SOOOOOO much...most of the stock is controlled by a small group that is looking for a place to sell it."
55. On November 30, 1996, "NNNot" falsely asserted that Heidelberg, Presstek's principal equipment customer, had taken an equity position in Presstek and had liquidated that position illegally. Heidelberg has never had an equity position in the Company.
56. On December 10, 1996, Hollingsworth, posting as "NNNot" sent a message to "Domcap", another alias used by Hollingsworth, in which he referred to Hollingsworth's accuracy in analyzing Presstek stock. By referring to himself in the third person and supporting the positions asserted by himself under a different screen name, Hollingsworth thus lent credibility to his own position and failed to reveal that he was commenting on his own analysis.
57. On June 22, 1995, May 1, 1996, May 14, 1996, June 12, 1996, and June 27, 1996, Hollingsworth appeared on CNBC television to offer expert stock market advice. CNBC is the cable television arm of the National Broadcasting Company ("NBC"). It specializes in securities, Wall Street and business news and is delivered by cable to homes, major hotels and airport waiting rooms frequented by business people as well as businesses, including brokerage firms which routinely have televisions tuned to CNBC at their brokers' trading stations. On each of the above-listed dates, Hollingsworth, while on the air, received an anonymous and apparently pre-planned telephone call from a viewer who provided only a first name and state of residence and who, without prompting, inquired as to Hollingsworth's evaluation of Presstek's stock. On each occasion Hollingsworth made negative statements about the Company. On one occasion, Hollingsworth even suggested that Presstek should be shot.
58. In May of 1996 and again in May 1997, Hollingsworth directly contacted Presstek investors and made false, misleading and negative statements about the Company in an effort to convince them to liquidate their substantial Presstek holdings and precipitate a price decline from which he would benefit.
59. In 1996, Hollingsworth, together with another individual, contacted Presstek's only stock analyst and, by making knowingly false and misleading statements about the company, successfully convinced the analyst to discontinue his analysis and coverage of Presstek. Hollingsworth subsequently stated on CNBC television that Presstek had no "Wall Street coverage", meaning that no stock analyst followed the company, without disclosing that he had destroyed the coverage by his own false statements to the analyst.
60. On June 6, 1996, Hollingsworth, posting as "NNNot" made an Internet post saying he had a "silver bullet" which would be "fired". He thanked "all of you who participated and helped me and this situation". He posted that the "bullet" would be fired "around 10:00 a.m. so tat all of you who helped will have time to short or buy puts". He posted "it's the patents...Be watching the tube, you know what channel". No "silver bullet" appeared concerning the patents.
61. At Hollingsworth's direction, knowingly frivolous challenges were filed with the U. S. Patent and Trademark Office concerning the validity Presstek's intellectual property for the sole purpose of enabling Hollingsworth and others, including defendant Patel, to broadcast to the general public that Presstek was facing 'genuine' challenges to its patents.
62. On January 23, 1997, "NNNot" falsely posted that the price of Presstek common shares was "rigged".
PARAG PATEL a/k/a Ppatel1073
63. Defendant Patel is a registered representative in New Jersey for defendant Hollingsworth's investment firm, Investors Security. Patel, acting alone, and in concert with Hollingsworth and others, has continued Hollingsworth's practice of making false and misleading statements regarding Presstek and its intellectual property.
64. On August 12, 1997, using the alias "Ppatel1073", Patel posted that Presstek's auditor was going to resign due to disagreements involving Presstek's revenue recognition policies. This statement was false.
65. Only on August 16, 1997, did Patel admit on-line that he is a short seller of Presstek stock. On information and belief, he has never disclosed his affiliation with Hollingsworth or Investors Security on the Internet.
66. Also, on August 16, 1997, "Ppatel1073" posted without any basis in fact that "Presstek has massive patent problems... if my initial research is correct, I think this stock would be an excellent short even at $15." He knowingly posted false and inflammatory statements that Presstek's "patents have been rejected three times by the U.S. Patent Office. The company forgot to tell shareholders this because they didn't think this was material..." This statement was false.
V. THE CLAIM
67. The cumulative effect of the dissemination of these false and misleading representations regarding the Company resulted in direct harm to the Company, its reputation, and its business relationships, contracts and dealings, as well as substantially increasing the volatility of its stock, all of the detriment of the Company and its shareholders. It precipitated the loss of time and attention by management and occasioned unnecessary legal fees and expenses.
COUNT I - DEFAMATION
68. Paragraphs 1 - 67 are incorporated as if fully set forth herein.
69. The defendants published the false and defamatory statements described above on the Internet, intending that they reach as wide an audience of securities purchasers and sellers and securities' professionals as possible, both in the United States and internationally, with the purpose that these statements artificially depress the price of Presstek stock.
70. The defendants' false and defamatory statements described above constitute libel per se as they are words tending to injure a person in his trade or business, and some of them directly or indirectly charge the company with criminal conduct, thus entitling the Company to a recovery without proof of special damages.
71. The defendants negligently published the false and defamatory statements described above concerning the Company causing the Company to suffer damages as more fully described below.
72. The defendants published the false and defamatory statements described above with knowledge that the statements were false, or with reckless disregard as to whether they were false, causing the Company to suffer damages as more fully described below.
COUNT II
UNFAIR TRADE PRACTICES - NEW HAMPSHIRE STATUTE
73. Paragraphs 1 - 67 are incorporated as fully if incorporated as fully set forth herein.
74. Presstek is a "person" within the terms of RSA 358 A:1, I.
75. The defendants are engaged in "trade" or "commerce" within the terms of RSA 358 A:1, II.
76. The defendants knowingly engaged in unfair and/or deceptive acts and/or practices by disseminating the false, misleading and defamatory information regarding the Company described above.
77. The defendants negligently engaged in unfair and/or deceptive acts and/or practices by disseminating the false, misleading and defamatory information regarding the Company described above.
78. The defendants' unfair and/or deceptive acts and/or practices include, but are not limited to:
a. disparaging the Company's goods, services and/or business by making false or misleading representations of fact in violation of RSA 358-A:2, VIII;
b. causing likelihood of confusion or of misunderstanding by the investing public as to the source and/or approval of the defendants' investment advice.
79. The defendants' unfair and/or deceptive acts and/or practices have caused the Company to suffer damages as more fully described below.
VI. DAMAGES
80. The defendants, through their dissemination of false and misleading statements about the Company, have improperly made significant profits, all of which should be disgorged.
81. The defendants, through their dissemination of false and misleading statements about the Company, have caused the Company to incur significant direct consequential damages including attorneys fees, consultant fees and expenses; lost officers, director and employee time and other such damages.
82. The defendants, through their dissemination of false and misleading statements about the Company, have harmed the Company's business reputation and its business contracts, relationships and dealings and substantially increased the volatility of its stock.
83. The defendants' conduct directed at the Company was willful, wanton, reckless, malicious, vexatious or oppressive, entitling the Company to an award of enhanced compensatory damages and double to triple damage and attorneys fees and costs pursuant to NH RSA 358-A:10, I.
WHEREFORE, plaintiff Presstek, Inc. Requests that this Court grant the following relief:
(a) Judgment for compensatory damages, together with interest thereon, at legal rate, plus additional and consequential damages, according to proof;
(b) Judgment for double or treble damages pursuant to NH RSA 358-A:10, I;
(c) Judgment for costs incurred herein, including attorneys fees to the extent allowed by law;
(d) Schedule a jury trial for the award of compensatory and statutory damages:
(e) Permanently enjoin the defendants from issuing false and misleading statements
concerning the plaintiff; and
(f) Such other and legal equitable relief as this Court may deem just and proper;
Respectfully submitted,
PRESSTEK, INC.
By its attorneys,
SHANEEN & GORDON, P.A.
Steven M. Gordon
Arpiar G. Saunders
Lucy J. Karl
By: Robert E. McDaniel
General Counsel
Presstek, Inc.
Dated September 17, 1997
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Paul, I recall that the SEC indicated their investigation is now looking at short sellers. You weren't involved with anything like this, were you?
Just wondering..........
Regards,
Nanny |
