Silicon Investor Deletes Posts|
February 7, 2000
Silicon Investor Deletes Posts
In ZiaSun Cyber-Libel Case
By AARON ELSTEIN
THE WALL STREET JOURNAL INTERACTIVE EDITION
In the latest twist in a groundbreaking cyber-libel case,
Silicon Investor took the unusual step of removing three
postings from an Internet stock message board at the
request of a company that has sued the writer for
Silicon Investor, a
stock-discussion Web site which
ordinarily doesn't delete postings
without the writer's consent
unless legally ordered to do so, said it honored the
request last week from ZiaSun Technologies to remove
the postings by Floyd Schneider because of an unusual
ZiaSun had recently won a preliminary injunction against
Mr. Schneider -- one of ZiaSun's fiercest Internet critics
-- ordering him to stop publishing "false statements"
about the company. The injunction stemmed from a libel
lawsuit the company had filed in U.S. District Court in
Seattle against Mr. Schneider and seven other online
critics. A trial is set for later this year.
Before the injunction, ZiaSun had tried to get Silicon
Investor to remove messages by Mr. Schneider that it
considered defamatory. But the Web site had refused,
citing its policy.
"To my knowledge, this is the first time we've been
presented with an injunction and removed postings," said
Ethan Caldwell, general counsel at Go2Net of Seattle,
which owns Silicon Investor.
notified Mr. Schneider Feb. 2
about its decision to remove the
three messages posted several
months ago about the Solana
Beach, Calif., Internet holding
company. Mr. Caldwell said
ZiaSun originally asked Silicon
Investor to remove the same messages last spring.
Mr. Caldwell said that since a judge decided there was
sufficient evidence that Mr. Schneider had posted
defamatory statements about ZiaSun to issue the
injunction, Silicon Investor decided to remove messages.
Mr. Caldwell added that Silicon Investor will wait until
the lawsuit is resolved before deciding whether to
suspend or terminate Mr. Schneider's membership. The
Web site's rules prohibit the posting of libelous material.
Mr. Schneider, a mortgage banker in Saddle River, N.J.,
who has posted thousands of messages about ZiaSun and
other companies using the aliases "The Truthseeker" and
"Flodyie," said he was surprised the messages had been
removed. "If they took off three, I guess that means the
rest are right," he said.
Mark Harris, a spokesman for ZiaSun, disagreed. "The
statements removed may be the ones that ZiaSun officers
took greatest offense to," he said. "There may be others
that go beyond the judge's determination of what he may
publish." He said the messages that were removed had
referred to ZiaSun executives as "criminals."
Blake Bell, a New York attorney who specializes in
Internet securities cases, said he couldn't recall an
instance of a message board ever deleting a posting at a
company's request. He said message-board participants
have agreed to have their messages removed as a part of
settlements with companies.
But he added that it's unlikely that Silicon Investor's
decision to delete Mr. Schneider's messages would quell
ZiaSun's critics. "After all, messages get copied all the
time and posted other places," Mr. Bell said. "I wouldn't
be at all surprised if they appear somewhere else."
The federal judge's decision to grant ZiaSun's request to
restrict what Mr. Schneider could publish had surprised
many legal experts, who said it's unusual for such
restraints to be granted in cases where freedom of
speech is an issue. Judges generally are reluctant to grant
preliminary injunctions because of concerns about
violating First Amendment rights.
Mr. Schneider said he wasn't present in court to refute
ZiaSun's charges and doesn't plan to appear at future
hearings. His attorney, Bob Weinberger of North Palm
Beach, Fla., didn't immediately return phone calls
The lawsuit and Jan. 21 injunction aren't the only
problems for Mr. Schneider in his tussle with ZiaSun.
Mr. Schneider also was accused of defamation in a
lawsuit filed in a California state court by Bryant
Cragun, a major ZiaSun shareholder and former
president of the company. The lawsuit stemmed from a
press release Mr. Schneider published on his Web site,
TheTruthseeker.com (www.thetruthseeker.com), on Jan.
1., and from messages he posted on Silicon Investor
about Mr. Cragun.
In the press release, Mr. Schneider
had alleged Mr. Cragun was
engaged in fraudulent dealings
involving a ZiaSun solicitation to
overseas investors. In the release, Mr. Schneider rated
ZiaSun shares a "strong sell" and called the company "an
old penny stock trick" because he alleged it illegally
marketed a private equity placement to overseas
shareholders as an initial public offering.
On Jan. 31, Judge Janis Sammartino of the California
Superior Court in San Diego ordered Mr. Schneider to
retract the press release. Ms. Sammartino also issued a
temporary restraining order barring Mr. Schneider from
posting any statements that "state, suggest, or imply" that
Mr. Cragun had engaged in "criminal behavior."
Mr. Cragun's attorney, Daniel Pascucci, said his client
filed his suit because Mr. Schneider had personally
targeted him and his family in his online messages and
distorted facts to tarnish his reputation.
In the retraction ordered by the court, Mr. Schneider said
the release "was not based on objective analysis of
ZiaSun's stock and value" and contained statements that
"were false or implied false facts."
Mr. Pascucci said a hearing for preliminary injunction
against Mr. Schneider is scheduled for Feb. 15.
Mr. Schneider did not appear at the court in San Diego
to defend himself and says he does not have a lawyer
working on that case.