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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Jeffrey S. Mitchell who wrote (95133)	8/30/2006 2:52:44 PM
From: StockDung	Respond to of 122088

Advocate group says Overstock should drop lawsuit to protect free speech Article Last Updated: 8/29/2006 11:24 PM By Bob Mims The Salt Lake Tribune Salt Lake Tribune The powerful Reporters Committee on Freedom of the Press says Overstock.com's libel and unfair business practices lawsuit against Gradient Analytics Inc. should be dismissed because it threatens "serious business reporting." The Arlington, Va.-based nonprofit journalist advocate group claims Overstock's suit goes "to the heart of financial reporting and will chill, if not outright prevent, the investigative digging necessary to cover the financial dealings of publicly traded companies." Those claims were made in a brief filed with the California District Court of Appeal and supported by Copley Press Inc. and The Bakersfield Californian newspaper. Similar arguments have been filed by the Chartered Financial Analyst Institute, a trade group for investment professionals. Gradient spokeswoman Karen Hinton on Tuesday called the latest briefs significant "because two highly-respected organizations . . . share our concern that, if this lawsuit proceeds, independent financial analysis, whether written by a journalist or an analyst, will become a thing of the past." The lawsuit alleges that Gradient and Rocker Partners hedge fund colluded to deliberately drive down Overstock share prices in 2005 through "short selling" - a practice in which stock is borrowed and sold, with sellers betting they can buy back the stock and bank the difference when share prices fall. Overstock's lawsuit claims Gradient knowingly wrote false and negative reports, causing Overstock's stock to slide and Rocker's profits to rise. The Salt Lake City-based Internet closeout retailer's shares had traded as high as $77.18 in January 2005; on Tuesday they closed at $17.97, up 46 cents from Monday. In March, Marin County Superior Court Judge Vernon Smith said the lawsuit should proceed, rejecting Gradient's claims that Overstock had sued Gradient only to suppress its criticism of the Utah company. Two weeks ago, California Attorney General Bill Lockyear filed his own arguments in support of Smith's decision. Overstock CEO Patrick Byrne on Tuesday accused Gradient and its supporters in the financial media as trying "to hide behind the skirts of the First Amendment. But "analysts are human too, and subject to the laws and regulations that govern our markets," he added. "We alleged that the analysts committed numerous regulatory and legal violations, in effect knowingly 'shilling' for a few favored clients: this was, in fact, their business model." But the Charlottsville, Va.-based CFAI disagreed. In its court brief, the trade group says: "Bringing negative yet truthful information and opinion to the market that is contrary to the almost consistently rosy outlook of management is not manipulation of the market." bmims@sltrib.com