Friday, April 13, 2007

Overstock.com Libel Suit: Could Have A Serious Chilling Effect On Organizations That Provide Financial Opinions

No, this is not an overstock.com blog, but I am keeping an eye on their libel suit, and how it affects short sellers who manipulate the financial press.

Court's OK Likely in Overstock.com Stock Libel SuitBy Mike McKee,The Recorder, 04-12-2007, via www.law.com

All that the attorneys for Overstock.com Inc. want at this point is a trial on the company's libel claims. And a trial it seems they'll get.

During 75 minutes of oral arguments Tuesday, San Francisco's 1st District Court of Appeal seemed ready to let the online retailer get a full airing on its claims that a financial analysis company and a hedge fund conspired to put it out of business.

"We're at the pleading stage," Justice Maria Rivera told the defendants' lawyers. "It's not time yet to decide all these various levels [of legal issues], because the evidence we have is basically skeletal."

Justice Ignazio Ruvolo indicated there was evidence even "at this stage of the proceedings" that could substantiate Overstock.com's claims.

Salt Lake City-based Overstock.com filed suit in 2005, accusing Gradient Analytics Inc. of conspiring with the analyst's client, Rocker Partners, to drive down Overstock.com's stock with reports based on false information.

Overstock.com contends that New Jersey-based Rocker convinced Arizona-based Gradient to give Overstock.com an "F" rating by, among other things, claiming that company executives had falsified accounting statements. The suit accuses Rocker of trying to profit from the short selling of Overstock.com stock.

The case has Wall Street's rapt attention. Financial journalists and stock analysts have argued in amici curiae briefs that a victory for Overstock.com could have a serious chilling effect on organizations that provide financial opinions...read more: here

4/13/2007 06:11:00 AM

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