ZiaSun Technologies, a San Diego-based company, sued four
internet posters in mid-1999 for allegedly waging a so-called
“cyberexpose campaign” against them in internet chatrooms.
The company and some of its officers alleged that the
individuals disseminated false information linking them to criminal
behaviour, pornography, improper financial interests, false
corporate disclosures and illegal business practices. They sought
court injunctions against further posting. They also demanded
$500,000 in lost earnings and earning capacity, reimbursement of
their legal costs and a public apology.
However, those responsible for the postings contended that
everything posted was absolutely true and therefore, as a matter of
law, they could not be held liable. One of the defendants, George
Joakimidis, counter-sued for fraud.
Two court actions were involved. Both cases made headlines in
January 2000 when the federal court in one case issued the first
known preliminary injunction in the US against internet defamation,
and the state court in the other case issued the nation's first
known temporary restraining order against internet market
manipulation.
In a settlement agreement announced yesterday by the parties,
ZiaSun and its officers dismissed all of their charges against the
individuals, dropped all of their demands for monetary
compensation, dropped their demands that the posters apologise and
retract their postings and agreed to pay George Joakimidis the sum
of $60,000. Except for one news release per side, the parties
agreed to make no future publications about one another.
One of the posters, Stephen Worthington, said of the
settlement:
“This is, in no uncertain terms, a victory
for free speech. If you know your facts, you should not be afraid
to stand up and fight for the truth. The suit appeared to be an
attempt by ZiaSun to silence those who have raised questions
concerning the operational and valuation issues associated with the
company.
“The securities markets require full and
open discussion of information, including all viewpoints. A public
company should not be using its power to sue those with opinions
different from the company's, since that would chill the exercise
of free speech protected by the First Amendment and thwart the
goals of the securities laws."
