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Stox threatens Stockwatch with defamation lawsuit

stox.com Inc URL
Shares issued 5,428,791
2000-01-28 close $10
Friday Jan 28 2000
EDITOR’S NOTE: The following letter appears to be a detailed and interesting reply by Patrick Lavin to the comments by ‘aces’ that appeared on Stockwatch’s ‘stox.com’ forum. Since the sensible forum for Mr. Lavin to deal with forum matters is that forum itself, this letter is also posted to the ‘stox.com’ forum at the Stockwatch Web site.

Mr. Lavin’s letter also raises the matter of privacy protection as it relates to the Internet. He is attacking ‘aces’ privacy, under the label of defamation: Stockwatch will seek to protect it.

As Internet privacy is of interest to all forum posters, we encourage our readers to consider Mr. Lavin’s response to ‘aces,’ and discuss any related Internet privacy issues on Stockwatch’s ‘stox.com’ discussion forum. Because Stockwatch forum posters do not have to register with Stockwatch, we have no way of knowing short of a phone call or letter from you — who is behind a posting handle. Since ‘aces’ first post on Jan. 17, stox’s stock has risen from $7.50 to today’s intraday high of $12.25.

January 27, 2000

Attention: Mr. John J. Woods
Canada Stockwatch
PO Box 10371 Pacific Centre 700 W Georgia St.
Vancouver BC V7Y 1J6

Attention: Mr. John J. Woods
Canjex Publishing Limited
P.O. Box 48800
2100-1111 West Georgia Street
Vancouver BC V7X 1K9

Mr. John J. Woods
Dear Sirs/Mesdames: RE: PATRICK LAVIN AND STOX.COM INC

We are solicitors representing Patrick Lavin and stox.com Inc (stox.com). Mr.Lavin is the Chief Financial Officer of stox.com. As you are well aware, stox.com is a listed company that carries on the business of aggregating and disseminating financial information on the Internet.

On January 14, 2000 you published material on Canada-Stockwatch.com that is seriously defamatory of our clients. Publication has continued since that date, and related material was published on January 17, January 20, and January 21, 2000.

The original publication and repetition shows a calculated and malicious attempt to damage both the business reputation of stox.com and the reputation of Patrick Lavin, both in his business and personal capacity. Mr. Lavin is shocked by this vicious attack on his personal integrity.

On January 14, 2000 material was posted on your site by a person identified as “aces”. The publication starts by referring to the existence of a “relationship” between Mr. Lavin and a third party, Mr. Alex Kuznecov. The following six sentences identify Mr. Kuznecov as an “unsavoury” individual, who engages in many “false trades”, and who as a result has been “disciplined” by regulatory
authorities. The posting then states:

Mr. Lavin has had many opportunities to rid himself of this unsavoury individual, but has chosen not to…. How can the chief financial officer of an upstanding company be involved with this kind of individual and maintain the pretence of being all “above board”?

It is defamatory to allege that a person keeps company with an unsavoury or dishonest individual, if the insinuation is that he, by reason of that association or otherwise, is also an unsavoury person or engaged in illicit conduct. In this case you have published material that in explicit language makes the inference that Mr. Lavin is tainted by the relationship. The implication is that Patrick Lavin is not “above board”. In context, the term “above board” clearly refers to matters of probity, honesty and integrity in his professional handling of matters in the financial business.

In the context of explicit references to “false trades”, the innuendos are of the most serious kind and calculated to cause serious injury to stox.com Inc. and Mr. Lavin whose business and occupation is in the financial industry.

The fact that you insinuate the libel by way of an interrogative statement is no defence. “It is immaterial whether the imputation is conveyed … by words used in a declarative or interrogative form”: Gatley On Libel, Eight Edition, paragraph #103.

The tendency and effect of the language is the test. The introductory words, “How can”, signal a rhetorical question. A rhetorical question is “a question asked not for information, but to produce effect”. The tone and context unmistakably conveys that the words amount to a positive assertion of bad character and misconduct. The use of the word “pretence” in this context confirms that the question format is a cover for malicious insinuation.  The word “pretence” means a false or hypocritical profession; a pretext or a cloak. It is synonymous with “false pretence”. One of the malicious imputations of the text is that Mr. Lavin is in fact maintaining a pretence. The libel portrays our client as a dishonest and false man who pretends to be honest.

The wording is sardonic mocking, and vitriolic. The disingenuous phrasing, attempting to conceal the libel in the form of a question, merely underlines the malice of the parties who participated in this publication. Subsequent postings published by you repeat the libels and aggravate damages. Particulars include:

aces date: 2000-01-17 10:51:57
aces date: 2000-01-20 09:38:52
aces date: 2000-01-20 14:57:19
joetrevor date: 2000-01-21 12:25:43

These related publications refer to stox.com as a “bogus enterprise”, and repeat the insinuation that Mr. Kuznecov, whom you have characterized as a man engaged in illicit and unethical conduct, is involved with the business of our clients. Taken in context with the publication of January 14, 2000 all of these publications are defamatory.

The third party referred to, Mr. Kuznecov, is neither a director, officer or in any other way involved in the management of stox.com. It is false to allege that Mr.Kuznecov is in some way associated with stox.com. Inc. There is no factual foundation whatsoever to the statement that Mr. Lavin, either in his personal capacity or as Chief Financial Officer of stox.com Inc. or in any other connection, is “involved” with Mr. Kuznecov either socially or in business dealings. The entire posting is based on a factual allegation of a continuing relationship that is not accurate. Mr. Lavin did have limited dealings with Mr. Kuznecov in the past in the
period 1997-1998, and prior to that with Mr. Kuznecov in his capacity as a stockbroker. Nothing in that previous relationship was improper. Mr. Lavin had no involvement whatsoever in the Caprice-Greystoke matter, referred to in your posting dated January 20, 2000.

The sting of the libel lies in the insinuations that Patrick Lavin is by reason of a continuing relationship with Mr. Kuznecov not “above board”, and that he is maintaining a “pretence” of honesty and integrity. These imputations are also seriously defamatory of stox.com Inc. They are all false and made with actual malice.

Your conduct from this moment onwards in responding to our demands to mitigate the damages caused by the publication will be taken into account in any assessment of damages by a court of law. We demand that you immediately respond as follows:

1.cease and desist from any further publication of material defamatory of Mr.Lavin or stox.com including any repetition or re-publication of the libels already published or similar libels;

2.delete the libellous postings from sites operated by Stockwatch;

3.provide us with the identities, names and addresses of the creators of the libelous postings, in particular the person identified as “aces”; and

4.provide us with the text of an appropriate, full and unqualified retraction and apology, for our review and approval, to be published on your site and at other locations to be decided by us. Be warned that anything less than a full and
unqualified apology will merely aggravate damages. Time is critical in taking steps to mitigate the damages of your publication. We demand that you provide us with a draft apology by 4:00 p.m. Monday, January 31, 2000. We require that publication cease immediately.

We also place you on notice that any further publication from this date will be taken as evidence that you are engaged in a common enterprise with persons whose identities are at present unknown to us to wilfully cause grave damage to our clients.  Due to the seriousness of this situation, we have taken care to lay out in detail the basis of our clients’ complaint. We have made you fully aware of the cause of the damage, and of the means available to you to mitigate damages. We advise that our clients reserve their right to commence action for recovery of substantial damages for defamation, both against Stockwatch and each of Stockwatch’s employees, editors and contractors who have in any way participated in the dissemination of these malicious libels.

Your publication has been disseminated to a very large audience, and is calculated to cause enormous damage.  Our immediate objective is to prevent further damages from your conduct, and to do whatever is possible to mitigate the injury and loss incurred to date. It is in your interest to prevent further damages.

We await your response.

Yours truly,

ALEXANDER, HOLBURN, BEAUDIN
(c) Copyright 2000 Canjex Publishing Ltd. http://www.canada-stockwatch.com

stox.com Inc URL
Shares issued 5,428,791
2000-01-31 close $9.7
Monday Jan 31 2000

January 31, 2000

Mr. David Gooderham
Alexander Holburn Beaudin & Lang
2700 – 700 West Georgia St
Vancouver, B.C.
V7Y 1B8

Sent by fax: 669-7642

Dear Mr. Gooderham

I have your letter of January 27, 2000, in which you threaten immediate legal action if I do not comply with your demands. Your clients, Patrick Lavin and stox.com Inc., have and continue to have ample opportunity to reply to and counter the posts you cite in your letter. They can use precisely the same medium and forum that the offending poster used to present their side of the Kuznecov story.

In fact, they can do even better: they can also present their side of the story and rebut ‘aces’ charges on other forums where ‘aces’ has never been. Had they chosen to do so, they would have reached the same audience with their side of the story, and more. But no, rather than explaining their side of the story in as many compelling words as they wish, they go running to their lawyer, complaining that they have been defamed, and seek to impose libel chill.

Your clients can still avail themselves of this opportunity, replying to ‘aces’ with as many words as they choose. Our stox.com forum, and possibly several others, is ready and eager to hear their side of the story as soon as they wish to break their self-imposed silence. I believe this is their appropriate remedy.

Accordingly, I will not ban posters from posting on our stox.com forum; I will not delete any postings; I will not provide you with any names; and I will not provide you with a draft apology.

My address for service is 1550 – 609 Granville St., Vancouver B.C. I come to work about 5:45 am, and usually stay until about 2:00 pm.

CDNX SYMBOL: URL
October 24, 2000

STOX.COM RESTRUCTURES MANAGEMENT

(Vancouver, CANADA) – stox.com Inc. (CDNX: URL) (the “Company”) wishes to announce that it is has restructured its senior management and Board of Directors. The Company has undertaken these measures to strengthen and streamline the management team, and build on the recent successful deployment of its products and services.

The Company wishes to announce the appointment of Mr. Bao Le as interim Chairman of the Board of Directors and the appointment of Ralph Peluso as Chief Financial Officer of stox.com. Mr. Bao Le brings many years of success at the senior management level of major companies such as Bell Canada (TSE: BCE) and Northpoint Communications (NASDAQ: NPNT), while Mr. Peluso carries with him an extensive track record as CFO of MCI Communications (now MCI Worldcom – NASDAQ: WCOM) and Winstar Wireless (NASDAQ: WCII). Both will retain their current responsibilities while assuming these new roles within the organization.

The Company wishes to announce the resignation of Mr. Patrick Lavin as Chief Financial Officer and director of stox.com. Mr. Lavin, as a founder of stox.com, has demonstrated the vision and drive necessary for stox.com to achieve success as a startup company, and continues to show leadership and loyalty to the Company in stepping aside as Chief Financial Officer to make way for Mr. Peluso. The Company also announces that Scott Blue has agreed to resign as an officer of the Company.

At this time the Company also wishes to announce the formal resignation of Mr. Claude West as Chairman of the Board and as a director. Mr. West was instrumental in helping the Company in its early stages of development and has played a significant role in the assembly of a fine team of senior management to lead the growth and evolution of stox.com. Mr. West is leaving the Board for personal reasons.

The Board of Directors now consists of Scott Blue, Jacob Brouwer, Joseph Grady, John Rybinski, and representing management, Bao Le and Ralph Peluso.

About stox.com
stox.com (CDNX: URL) is a network and software application company which delivers innovative, cost effective, reliable and efficient technology solutions for real-time data delivery and financial information, online trading systems, and private labeled web applications for the online financial community and other online transaction based industries. These solutions are provided through its global private network and innovative software applications. Information about stox and its products can be found on the World Wide Web at http://www.stox.com.

On Behalf of the Board:
“Bao Le” Bao Le,
President

http://www.zoominfo.com/people/Lavin_Patrick_8925867.aspx