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Pastimes : Investment Chat Board Lawsuits -- Ignore unavailable to you. Want to Upgrade?

To: Jeffrey S. Mitchell who wrote (1896)	8/23/2001 6:50:27 PM
From: jhild	Read Replies (1) \| Respond to of 12465

Company sues over info put on Yahoo message board By ANN MERRILL Minneapolis-St. Paul Star Tribune August 23, 2001 - Treading into an important new area of Internet law, Nash Finch Co. has filed a lawsuit alleging that some people - possibly employees - have posted confidential information about the company on a Yahoo message board. Courts, companies and often their current and former employees are working out what legally can be said about businesses on the Internet. The lawsuit by Nash Finch, a food wholesaler and retailer based in Edina, Minn., is an example of how companies are changing their legal strategies to go after people they believe have said harmful things about them on the Internet. Normally, companies had slapped people with lawsuits that alleged libel, and individuals had defended themselves by saying their speech was protected by the First Amendment. But the companies that go after them have begun trying to get around that by alleging that such individuals did other things wrong, too. The Nash Finch lawsuit, for example, claims breach of contract and misappropriation of trade secrets. If the defendants turn out to be Nash Finch employees, they have violated the company's Code of Ethics and Business Conduct and Associate Handbook, the suit alleges. Filed late last month in Santa Clara County, Calif., the suit did not name defendants specifically, but called them (John) "Does" 1 through 50. The company said it will amend its lawsuit once it learns the identities of those involved. To do that, Nash Finch lawyers are seeking to subpoena from Yahoo the real identities of the people who wrote the postings under made-up screen names. A Nash Finch spokeswoman confirmed the company has filed the lawsuit, but declined further comment. The company has hired Allison Chock of the California-based law firm of Latham & Watkins, who also declined to comment. Details and dates of the specific Yahoo postings are unknown, but recent postings by someone alleging to be a former board member are highly critical of Nash Finch CEO Ron Marshall, who joined the firm in 1998. One of the postings questioned Marshall's integrity while another casts doubt on the validity of the company's financial reports. Neither specified any particular wrongdoing. The information placed on the Nash Finch message board has caused "irreparable injury" to its business, the suit alleges. So what can you say about a company on the Internet? Message-board participants have the right under the First Amendment to voice their opinions. That freedom is troublesome for companies and their legal and public-relations staffs, which wince about the complaints and scramble to correct inaccurate information that could be posted by consumers, investors, employees or competitors. If a company sues, alleging simple business disparagement or perhaps defamation, its goal isn't necessarily to win, said Marshall Tanick, a First Amendment expert at Mansfield & Tanick in Minneapolis. The strategy is "to force the other person to incur huge legal expenses that will deter them and others" from making such statements, he said. Companies typically shy from suing customers because it creates bad publicity. Thus, much of the legal activity involves employees or former workers. "I'm seeing it happen with increasing frequency ... yet very few (cases) go all the way" to trial and verdict, Tanick said. A company's strategy typically includes filing in a state that might be inconvenient and costly for defendants. Lawyers will seek ways to avoid First Amendment issues because they are difficult to win. One option is to allege breach of contract or violation of trade secrets rather than defamation, he said. Yet that's not foolproof. For example, Ford Motor Co. unsuccessfully sought to stop a man from putting Ford's internal documents on his Internet site. Ford said the postings included blueprints for new engines and schedules for new vehicles, violating trade secret laws. A federal judge ruled against Ford, citing the First Amendment. Many critical Web sites have been started by those with an ax to grind against a company, but some have been established by those hoping to make a buck selling the domain name back to the company. trnonline.com

To: Jeffrey S. Mitchell who wrote (1896)	8/13/2003 10:39:53 PM
From: Jeffrey S. Mitchell	Respond to of 12465

Re: 8/11/03 - [ECNC] eConnect CEO Pleads Guilty to Securities Fraud DEBRA W. YANG United States Attorney Central District of California -------------------------------------------------------------------------------- Thom Mrozek, Public Affairs Officer (213) 894-6947 thom.mrozek@usdoj.gov August 11, 2003 eCONNECT CEO PLEADS GUILTY TO SECURITIES FRAUD The former CEO of eConnect pleaded guilty today to federal securities fraud charges for orchestrating a scheme to distribute false information designed to boost the stock price of the publicly traded company. Thomas S. Hughes, 55, of Rancho Palos Verdes, pleaded guilty this afternoon to three counts of securities fraud for issuing false press releases and making false statements on the company’s website. Both eConnect, which was based in San Pedro (symbol: ECNC), and Hughes were sued by the United States Securities and Exchange Commission in 2000 for issuing false press releases. In April 2000, to resolve the SEC action, Hughes agreed to a permanent injunction barring him from future violations of federal securities laws. In court today, Hughes also pleaded guilty to one count of criminal contempt of court for spreading misleading information about eConnect in violation of this injunction. By pleading guilty, Hughes avoids a trial that was scheduled to begin on August 19 in federal court in Los Angeles. Hughes is scheduled to be sentenced by United States District Judge Nora M. Manella on December 1, at which time he faces up to 30 years in prison for the securities fraud charges and an indefinite maximum sentence for the contempt count. The SEC suspended trading in eConnect stock on July 26, 2002. At the same time as the criminal case was filed on August 7, 2002, the SEC filed a second civil lawsuit charging Hughes, eConnect and others with various federal securities law violations. After resolving the case against the other defendants, the SEC will ask Judge Manella to grant summary judgement against Hughes at a hearing scheduled for September 22. United States Attorney Debra W. Yang said: “Manipulation of the markets will not be tolerated. Along with the FBI and the SEC, my office is committed to swiftly exposing any securities fraud scheme and to bringing perpetrators to justice. That commitment only increases when a defendant acts in violation of a court order intended to prevent these fraud schemes from recurring. “The cases jointly filed by my office and by the SEC demonstrate our willingness and ability to work together to quickly protect the victims of unscrupulous executives,” Yang continued. Ronald Iden, Assistant Director in Charge of the FBI in Los Angeles, stated: "We will investigate all credible allegations of corporate fraud and, working with our investigative partners and the U.S. Attorney, bring violators to swift and certain justice to restore the trust of the American people in the marketplace." In July 2002, Hughes oversaw the issuance of false and misleading press releases that claimed: · eConnect had received a $20 million dollar investment in "AA"-rated, asset-backed bonds from another issuer; · eConnect had begun a stock repurchase program; and · eConnect had received a purchase order to sell $964,000 worth of its key product, the eCashPad. In fact, the so-called “AA” bonds were not rated and had little value and there was no stock repurchase program. The press release regarding the nearly $1 million sale of eCashPads was misleading because it caused the public to believe the purchase orders came from a company that had no knowledge of eConnect. This case is the product of an investigation by the Federal Bureau of Investigation, which received assistance from the Securities and Exchange Commission and NASD Regulation, Inc. Release No. 03-112 usdoj.gov