This part bears repeating:
V. THE DEFENDANTS' USE OF THE INTERNET TO DEFAME THE
ZWEBNERS AND MANIPULATE STOCKS
The Internet
18. The “Internet” is a global array of computer networks accessible all over the world.
19. Use of the Internet as a conduit of information has exploded as more and more people have signed up as Internet users. There are now many millions of Internet users worldwide. The Internet has become a social and commercial force of immense importance, where information can be immediately posted and relayed throughout the commercial world.
20. Throughout the Internet, there are dozens of “stock talk” bulletin boards, news groups, and chat rooms. Included among these is the “Silicon Investor,” the Web address of which is http: www.techstocks.com/investor/main.
21. Individuals have posted hundreds of thousands of messages to these bulletin boards. There are more than three so-called threads or posts regarding DCI on Silicon Investor bulletin boards. These threads are accessed by the home name “DCTC.” These posts are read by people around the globe. Silicon Investor, whose bulletin boards include one or more for DCI, receives between 2.5 and 4 million hits per day on its site.
22. People who post on bulletin boards (once they register with Silicon Investor) are not required to disclose their real identities or whether the information they are disseminating is accurate. They may thus hide behind a shield of anonymity believing they can fabricate and intimidate with no risk of repercussions.
The Defendants' Scheme to Defame the Zwebners and Manipulate Stock Prices
23. Using their aliases, “bgtit”, “Spider Valdez”, and “Rico Staris,” defendants Dumont, Doe I and Doe II, acting in concert with other Doe defendants attempting to manipulate the stock of DCI, posted false and defamatory information about the Zwebners on Silicon Investor Internet chat lines.
24. The defendants went so far as to create a new chat line called “No Bash for Legacy” for the specific purpose of ridiculing the plaintiff, Michael Zwebner and his brother, Charles Zwebner, and the public company of which the Zwebners are directors and officers.
25. The defendants deliberately copied and posted defamatory and false information regarding Michael Zwebner and his brother Charles on an Internet interactive board established for public discussion about another company, Airstar Technologies, Inc.
(“ASTG”), knowing full well that the Zwebners were attempting to acquire this company. The defendants' dissemination of false and defamatory information misled ASTG directors and shareholders and caused the Zwebners to abandon the proposed acquisition.
26. The defendants either knew the statements they posted on the Silicon Investor chat lines regarding the Zwebners to be false or otherwise made them with reckless disregard as to the truth of the information and with the intent to harm the Zwebners and influence the prices of publicly traded stocks.
27. For many months the management of DCI has been attempting to secure institutional investors and/or a purchaser of the Company. For some time, DCI has thus been the subject of merger and acquisition rumors.
28. In order to maximize the value of the Company and hence the amount potential suitors would pay for DCI, the current management and insider shareholders of DCI have been trying to make the Company appear to be financially healthy and to have the potential for high profits.
29. For most of the past six months, the Company and its stock have not performed well.
30. On information and belief, the defendants, acting in concert with DCI insiders, have been attempting to divert attention away from the Company's poor performance by blaming fictitious outside forces for causing indicia of poor corporate performance, such as, among other things, depressed stock prices.
31. To this end, the defendants have been disseminating lies over the Internet, falsely accusing the Zwebners of, among other things, short selling DCI stock and otherwise manipulating DCI stock prices.
32. In truth, it is defendants, and those DCI insiders acting in concert with them, that are manipulating DCI stock prices by employing falsehood and deceit in an effort to deceive investors into believing that the Zwebners and others are to blame for the stock's poor performance. The defendants have sought to deceive investors and potential suitors into believing that the Company is not performing as poorly as corporate indicators suggest, but that rather the Zwebners are somehow distorting the true financial picture of the Company through purported sales of “invalid stock” and manipulation of stock prices.
Irrespective of the defendants' motive and purpose in disseminating this information, these remarks that the defendants have widely and maliciously published over the Internet are absolutely false and defamatory.
33. The Zwebners have repeatedly notified defendants through the Internet and otherwise that the information they are disseminating is false. Defendants nevertheless persist in smearing the Zwebners' names and reputations, for their own commercial purposes, through the publication of malicious falsehoods and innuendo over the Internet. |
