A company officer sued three individual investors for allegedly posting defamatory comments on a stock discussion message board, and served the suit by posting it on the same boards that are at the core of the complaint.
Dean Dumont, one of three defendants, first learned of the suit filed by Legacy Software in a US District Court in New Hampshire when he logged on to the Silicon Investor Web site Thursday night.
Dumont hit the boards to discuss the performance of his stocks, but instead found himself reading a legal filing with his name on it. The filing charged intentional infliction of emotional distress, invasion of privacy, defamation, and unfair trade practices.
Dumont, an investor in Milford, New Hampshire, had been investigating the background of Legacy Software chairman Michael Zwebner.
John R. Skelton, the lead attorney in the suit brought by Bingham Dana LLP could not be reached for comment.
"I've been trying to do due diligence on Legacy," Dumont said. "And his filings don't seem to be up-to-date. I'm doing my homework and he thinks I'm maliciously slandering him."
The filing charged that Dumont and his cohorts went so far as to create a new message board "for the specific purpose of ridiculing the plaintiff."
The two other defendants are named in the suit under their online aliases, Spider Valdez and Rico Staris.
Dumont objected to the unusual and very public method that Legacy Software used to serve the lawsuit.
"I don't think [Silicon Investor] should have allowed them to post legal proceedings," Dumont said. "The administrator should have pulled it off."
Silicon Investor webmistress Jill McKinney said that while the Securities and Exchange Commission (SEC) has in recent months cracked down on stock discussion boards, lawsuits brought by individual companies are relatively rare.
"I've seen many more [lawsuits] on behalf of the SEC rather than individual companies," McKinney said. She added that Silicon Investor would not provide the names of the anonymous posters unless faced with a subpoena. No subpoena has yet been served on the company.
The suit suggests that the three investors are involved in a complex conspiracy.
Zwebner is accusing Dumont and his anonymous cohorts of colluding with DCI Telecommunications, Zwebner's former employer. Zwebner claims he worked for that firm until February 1998 after selling his telecommunications technology company, Cardcall, to the firm on 19 February 1997.
The filing suggests that there was an acrimonious parting between DCI and Zwebner, and that that the company is trying to drag Zwebner's good name through the mud.
Dumont scoffed at the idea that he is working with "DCI insiders," as the suit states, and said Zwebner is trying to cover up some unspecified misdeed.
"If he wants to sue me for doing due diligence, that's fine," Dumont said. "But what is he hiding?"
