Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: EL KABONG!!! who wrote (3659)	9/5/2002 8:30:34 PM
From: Jeffrey S. Mitchell	Respond to of 12465

Re: 9/4/02 - [Elgindy] Stockwatch: TSX-V member Global sues Sun over Elgindy piece TSX-V member Global sues Sun over Elgindy piece TSX Venture Exchange TSX Wednesday September 4 2002 Street Wire by Brent Mudry Howe Street brokerage Global Securities and its founder and chairman Art Smolensky have launched a libel and defamation suit against Southam Inc., publisher of The Vancouver Sun, one of two local daily newspapers, and business reporter Derrick Penner over its coverage of the Anthony Elgindy scandal three months ago. In a statement of claim filed Friday in the Supreme Court of British Columbia, Global claims a misleading Sun headline, juxtaposed with a prominent picture of Mr. Smolensky, the innocent broker of FBI target Amr Ibrahim (Anthony) Elgindy, gave the false and misleading impression that Global and Mr. Smolensky were key targets in the high-profile U.S. prosecution. The suit also claims a subsequent "clarification" by The Sun was inadequate, as it made no reference to Mr. Smolensky, included no apology and was published with little prominence. The allegations in the defamation suit, filed by Vancouver lawyer Howard Shapray of Shapray Cramer, have not yet been proven in court and no statements of defence have yet been filed by either Southam or Mr. Penner. Global and Mr. Smolensky's defamation suit is the latest Vancouver development in the case of California short seller Mr. Elgindy, named in a six-count grand jury indictment unsealed May 22 as the alleged ringleader of a five-person ring which accessed top-secret FBI and grand jury records, and used the information to profit from selling short the stocks of targeted penny stock promotions. The offending Sun story, published May 24, ran a prominent "teaser" headline, "Broker Arrested, Charged," on the front page of the business section, drawing readers to the story on the third page of the section. The story featured the headline, "B.C. Accounts Used in Fraud," and the sub-headline, "Vancouver's Global Securities figures in New York investigation of short-selling scheme." "The natural and ordinary imputation of the words of the headline and sub-headline referring to a 'Broker' and to 'B.C. accounts' and to 'Global Securities,' read in conjunction with the closely and prominently juxtaposed photograph of Mr. Smolensky, was that Mr. Smolensky had been arrested and charged as being part of a fraudulent stock trading scheme. That imputation was false," states lawyer Mr. Shapray in the suit. Although not noted in the Vancouver court filing, no broker was charged or arrested in the indictment of the Elgindy Quintet. Mr. Elgindy and Troy Peters have not been brokers for a number of years, Mr. Elgindy's key partner Derrick Cleveland, also a Global client, is a convicted drug dealer, a credential U.S. regulators frown on in broker registration applications, and co-accuseds Jeffrey Royer and Lynn Wingate were FBI special agents. The defamation suit also takes issue with The Sun quoting the indictment as stating the Elgindy ring "short sold stock of targeted companies through brokerage accounts at Global Securities in Vancouver, British Columbia," without adding "and elsewhere." (While Global was the only brokerage noted in the indictment, other court filings note the Elgindy ring also dealt at other institutions.) "The effect of the false quotation was to falsely imply that the (sic) Global was the only brokerage firm and Mr. Smolensky was the only broker used by the accused conspirators to further their criminal scheme. In fact, the accused conspirators dealt through several reputable brokerage houses and institutions including Solomon (sic) Smith Barney, Bank of America, Royal Bank of Canada and Bank of Montreal," states the suit. Lawyer Mr. Shapray notes that on May 25, immediately after publication of the offending article, he sent a letter to Southam strongly expressing the concerns of his clients Global Securities and Mr. Smolensky, and demanding a correction and apology. "Only a reader who very carefully reads the entire article may realize that it was not Mr. Smolensky who was the true subject of the initial headline on page C1," stated the legal letter. Mr. Shapray described the article as an "attempt to smear Mr. Smolensky's character by falsely linking him with the alleged fraudulent activity." The lawyer stated that Mr. Smolensky's identity as the broker of Mr. Elgindy is "wholly irrelevant." Mr. Shapray claims The Sun's subsequent clarification, in which it said the article "did not mean to suggest that Global knowingly participated in any misconduct," fell short of clearing the smear of Global and Mr. Smolensky. In fact, the lawyer claims that by not mentioning Mr. Smolensky in the clarification, The Sun compounded and aggravated the original defamation of the Global chairman. The suit seeks unspecified general, aggravated and punitive damages. (c) Copyright 2002 Canjex Publishing Ltd. stockwatch.com new.stockwatch.comTSX-165-20020905&region=C&symbol=*TSX