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News for 'ADOT' - (Trading Harsh Words: Ex-VP's Postings Lead to Lawsuit)
ALBUQUERQUE, N.M., Feb 28, 2005 (Albuquerque Journal - Knight Ridder/Tribune Business News via COMTEX) -- A city penny stock company and one of its former vice presidents are locked in a legal battle over what can -- and cannot -- be said on the Internet.
Advanced Optics Electronics is suing Susan Blumenthal, a former vice president for communications for subsidiary company Biomoda, for $13.5 million. The suit claims she has posted false accusations online that have hurt business and ADOT's stock price.
Founded in 1996, the business says it is developing large flat-panel displays for outdoor signs and other applications. It has yet to complete a commercial installation of the technology.
Blumenthal, a freelance writer living in Placitas, has countersued ADOT and Biomoda for an unspecified sum, alleging the companies and their attorneys' "frivolous and malicious" lawsuits have damaged her reputation and cost her time and money.
She claims her comments are protected under the First Amendment.
1,200 posts The ADOT suit in Albuquerque's Second Judicial District Court said that between July 2003 and November 2004, Blumenthal made more than 1,200 anonymous posts to www.RagingBull.com, an online forum where posters discuss the performance of various company stocks.
The suit said her posts contained numerous false allegations of stock fraud involving ADOT, Biomoda and company executives. The suit said she has accused the company of operating a so-called "pump and dump" stock scheme and of issuing fake press releases.
It said Blumenthal's "public campaign to purposely harm ADOT and Biomoda and their respective shareholders" has had a negative effect on the company's stock.
The suit said Biomoda is in the final stages of an initial public offering, and "is concerned about its ability to raise investment funds in light of the attacks."
ADOT has a $600,000 investment, or about a 35 percent ownership share, in Biomoda, which is working to commercialize lung cancer detection technology developed at Los Alamos National Laboratories. The two firms share executive officers and office space in Albuquerque.
Blumenthal said she observed a six-month moratorium on speaking about the company after reaching a 2003 settlement regarding unpaid wages, and that she never directly alleged wrongdoing by the company or its officers as other posters to the online forum Raging Bull have done.
"I just posted press releases and (Securities and Exchange Commission) filings so investors would have information so they could make the right decision," she said.
For example, when the company would issue a news release saying it was close to releasing a product, she would post previous company news releases saying the same thing but going back years.
Charles Armgardt, an attorney for ADOT and Biomoda, contends her statements about the company exceed the bounds of the First Amendment.
"As Oliver Wendell Holmes once said, the right of free speech does not mean one can falsely shout fire in a crowded theater or commit libel and slander," he said. "In our society, speech has to be delivered lawfully."
CEO keeps quiet ADOT CEO Leslie Robins declined comment for this story but did say his company was on track for completing its first commercial billboard contract early this tear.
In 2000, Robins told the Journal ADOT had finished the prototype board and had six orders on the books.
The ADOT suit alleges that Blumenthal's postings led to others posting death threats to company officials.
For instance, the suit cites one posting on March 25(2004) in which a poster using the moniker "inkogkneeetoe" wrote that company executives "will taste the anthrax."
The suit said Blumenthal encouraged the threatening posts, in one case asking for inkogkneeetoe's e-mail address "apparently so she could provide the whereabouts of ADOT management."
Blumenthal says she only asked for the poster's e-mail in case the poster wanted to participate in a class-action lawsuit, should one be filed against the company, and that some of her comments were taken out of context to suggest encouragement.
The legal issues surrounding what people can say in chat rooms and bulletin boards are still relatively new.
Judges in past lawsuits against so-called "cybersmearing" have largely ruled in favor of maintaining the anonymity of Internet posters, and many such cases have been dismissed. But one company CEO involved in a recent Miami case against a Raging Bull poster has managed to track down the identities and reach settlements with four cybersmearers, according to Law.com, an online clearinghouse of legal information and journalism.
New frontier "This bulletin board type stuff is relatively new in the financial reporting markets," said Richard Follingstad, CEO and chief investor for Marketspace Financial. "So there is no past litigation to create some type of guideline on defamation of character."
Most sophisticated investors ignore such Internet chatter, he said.
Blumenthal posted on Raging Bull under the alias "athena_sword."
She said she told another Raging Bull poster her real identity, and the poster then revealed it to others on the bulletin board.
Blumenthal's screen name and posts were removed by Raging Bull in January.
She writes an online blog in which she chronicles the ongoing lawsuits and company activities.
"It would be easier to print a retraction on Raging Bull and have it all go away," she says. "But as Americans, we have a responsibility to alert people to situations we think may not be right, and they can make their own decisions. I've done this for the public interest."
By Andrew Webb
To see more of the Albuquerque Journal, or to subscribe to the newspaper, go to http://www.abqjournal.com.
(c) 2005, Albuquerque Journal. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.
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highway..you think ppl can sue sterling & a few others for pumping CMKX??? or am i in trouble for bashing cmkx..lol
-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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I think itwas lame on her part to post 1200 bashes, but at the same time, we have no protection from some of these crap companies pumping out false info, ( all they have to do it report a correction ) leading to us losing money. So why should it be wrong for a buyer to put out false info about Co's. Kind of one sided if she gets the chair.
If there was more out there protecting us, I'd say give her what she ceserves, but with the way things are, I think she is alright in my book.
Posts: 839 | From: Lynn, MA | Registered: Jan 2005
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