Janice is definitely getting the media coverage -ng-
June 29, 1999
Dow Jones Newswires
Co. At Odds With Silicon Investor Over Msg Brd Remarks
By JOHANNA BENNETT
NEW YORK -- When 1st Net Technologies Inc. (FNTT) Chief Executive Greg Writer launched a message board on Silicon Investor, it seemed as good a way as any to chat with investors.
And chat he did. In fact, between December and May, Writer and other officials at 1st Net Technologies posted press releases, answered investors' questions and generally defended the company to a group of vocal critics.
Now, those same company officials seem to think it was all a big mistake.
"It has turned into nothing more than a farce," said 1st Net Technologies President Cliff Smith. "It is a battleground for people bent on discrediting the company."
After three months battling online detractors who bashed the company for everything from its press releases to Writer's disciplinary record with the National Association of Securities Dealers, officials at 1st Net Technologies said the message board on Silicon Investor has become a haven for unscrupulous short sellers. So now, the company has demanded that Silicon Investor erase the message board from its Web site.
The result has been something of a stalemate. Silicon Investor insists that its members don't appear to have violated the Web site's rules of conduct. 1st Net Technologies has threatened legal action. And foes and fans of the San Diego holding company - it owns several online investment news letters - continue to post on the board.
"This is outrageous," said Janice Shell, a well known member of Silicon Investor and frequent critic of 1st Net Technologies. "They started the thread. This was their choice. They invoked the discussion, but they got more than they bargained for and that is their problem."
The brouhaha started in late March, almost three months after Writer launched the message board on Silicon Investor.
The thread, which had been largely ignored by the public, exploded with activity in late March after 1st Net Technologies' shares hit a year-high of 7 13/16. The stock gained more than 4 a share in two days of heavy trading on the OTC bulletin board.
Not everyone was happy.
Message-board participants had discovered that 1st Net Technologies' vice president of public relations, Jeff Chatfield, was posting bullish messages about the company without disclosing his identity or corporate affiliation. Angry messages flooded the bulletin board, eventually compelling Writer to post an apology a few days later.
Writer admitted in a message board posting that he encouraged employees, officials and shareholders to use the board. But he denied the stock surge stemmed from any message board activity.
Chatfield didn't respond to requests for an interview. Writer initially referred all questions to attorneys at The Krueger Group, the San Diego law firm that represents 1st Net Technologies, and later couldn't be reached for comment.
"It was not my intention to use this board to hype our stock," Writer wrote in a message dated March 20.
Silicon Investor: Site's Code Of Conduct Wasn't Violated
Chatfield was banned from posting further messages, according to Jason Howard, an attorney for 1st Net Technologies. Writer and Smith continued posting on the site.
By then, however, a gaggle of detractors found their way to Writer's message board, including a band of loosely affiliated cybersleuths, known on Silicon Investor as FBN Associates. Over the next few weeks, they grilled Smith and Writer, accused the company of issuing misleading press releases and posted information about Writer's NASD disciplinary record.
Between 1987 and 1993, Writer was disciplined by NASD, as well as securities regulators in Idaho and Kansas. Among the list of reprimands was a 1990 NASD ruling barring him from the securities industry and fining him $200,000 for allegedly selling unregistered securities and making false statements to NASD, according to agency records.
At the time, Writer was a principal in a Colorado-based broker-dealer, Oxford Group, which acted as a market maker in a merger deal.
In a written statement issued by an attorney for 1st Net Technologies, Writer denied any wrongdoing. The NASD fine and barring followed a Securities and Exchange Commission investigation into the merger sparked when Writer went to regulators with concerns of possible fraud, according to the attorney's statement.
Smith downplayed the significance of Writer's past dealings with securities regulators, arguing that detractors have unfairly used the information to bludgeon the company and Writer on the message boards.
"It is just slash and burn, and it's the same people over and over again," he added.
Those arguments haven't been enough to compel Silicon Investor to remove Writer's message board.
The message board's participants haven't violated the Web site's code of conduct, said Ethan Caldwell, general counsel for Go2Net Inc. (GNET), which owns Silicon Investor.
While Silicon Investor forbids vulgarity, personal attacks or harassing behavior, members are allowed to voice honest criticism about companies, he said.
"This is a case of someone cring wolf," Caldwell said, referring to 1st Net Technologies' reaction. "They set themselves up. They did not gauge the critical comments they could get."
Writer and other officials at 1st Net Technologies aren't the first corporate executives to post messages about their companies on the Internet. A growing number of companies, especially small corporations, use chat rooms and message boards as a way to communicate with investors, dispense news and dispel untrue rumors.
Not everyone agrees that such tactics are wise. Many companies forbid employees and officials from chatting about the corporation online, worried that the slightest misstatement could expose them to legal entanglements such as shareholder lawsuits.
No Place For The Thin-Skinned
Meanwhile, Web communities like Silicon Investor and Yahoo! Inc.'s (YHOO) Yahoo! Finance are no place for the thin-skinned. The message boards and chat rooms are touted as places where investors can find open discourse and voice honest criticism and those discussions are often caustic.
"We are not here to have every thread filled with gushing comments. If a company's manager wants to participate (on a message board), they have to withstand the heat," Caldwell said.
But that's not to say that chat rooms don't have a dark side.
Securities regulators and stock market officials have become increasing concerned over the use of chat rooms by fraud artists and short sellers looking to manipulate stock prices.
The SEC's much touted "cyberforce" routinely searches the Internet for signs of stock fraud. Meanwhile, many companies have assigned employees to surf the Web for remarks about the company, often filing lawsuits charging message board participants with definition and stock manipulation.
These tactics have come under fire by online advocacy groups that argue companies are using lawsuits to silence online criticism.
|
