Laser Vision, Zoltek, Pulaski battle inaccurate chat on message boards

Margie Manning

For eight months, an investor using the screen name "cobrashark2000" posted disparaging and false comments about Laser Vision Centers Inc. and its management on the Yahoo! Internet message board.

Those messages, starting in October, came to an abrupt halt after Laser Vision went to court this spring. The message poster identified himself June 23 as A. Smith of Virginia and issued an apology -- via the Yahoo! message board.

Laser Vision is among a handful of local companies that have been zinged by the growing popularity of Internet stock message boards.

RehabCare Group Inc., Pulaski Financial Corp. and Zoltek Cos. Inc. also found and stopped anonymous posters from spreading false rumors.

"The unfortunate advantage of the Internet is people are more likely to make a disparaging statement when they are making it anonymously," said William Donius, president and chief executive of Pulaski Financial, which operates four Pulaski Bank branches.

"They don't realize companies can take action and track down these people," Donius said.

It's a cumbersome process, however, that can be expensive, said attorney Robert Hoemeke at Lewis, Rice & Fingersh. He said his firm has been involved in a few Internet libel cases involving national companies based in St. Louis, but declined to identify the clients.

"The expense associated with it keeps most people from dealing with it," Hoemeke said.

Tracking cobrashark

For Laser Vision, the cost of finding cobrashark2000 was less than $2,000, said John Stiles, director of investor relations.

The company hired attorney Eleanor Maynard of Suelthaus & Walsh to handle the case. She filed suit March 29 in St. Louis County Circuit Court, accusing "John Doe, a person presently unknown to the plaintiff" of using the message board to make false and harmful defamatory statements about Laser Vision, a provider of excimer lasers used to correct vision problems.

The suit alleged that cobrashark2000 had made: "false statements indicating the Chairman and CEO of Laser Vision had lied to and misled investors and shareholders and false statements indicating that Laser Vision's accounting system is suspect." The suit also said the poster called on federal authorities to become involved in "this apparent securities fraud."

Once the suit was filed, Maynard said it took three subpoenas to identify cobrashark2000.

One subpoena to Yahoo! yielded the name of the poster's Internet access provider. A subpoena to the access provider led to a second Internet service. The final subpoena identified the message poster as Smith.

"I received a phone call from him once he was served with the papers. He was apologetic and anxious to do the right thing," Maynard said.

The company agreed to drop its legal action provided Smith apologize on the Yahoo! board, said Robert May, Laser Vision's vice chairman and general counsel.

Alan Henderson, chief executive at RehabCare Group, a health-care staffing firm, had less difficulty tracking down an Internet poster, who he said was spreading misinformation about company employees. The poster's screen name provided enough clues that RehabCare executives could figure out his identity.

"We had a lawyer contact him regarding the messages. We've heard little from him since," Henderson said.

Zsolt Rumy, chief executive at carbon fiber maker Zoltek, also was able to identify a company critic, who was posting messages on the Motley Fool and Silicon Investor boards. Rumy went on the boards himself, identifying the poster.

"After that things got a little more honest," he said.

At Pulaski Financial, Donius threatened legal action against bank critics on the Yahoo! message board. In a May 26, 1999, posting, Donius called the critical messages false, misleading, offensive and irresponsible.

The bank's law firm, Muldoon, Murphy & Faucette of Washington, D.C., monitored the site and asked Yahoo! to remove the messages.

"It was resolved very inexpensively with our law firm by one or two letters. We opted not to take action against the individual," Donius said.

Responding online

Donius' decision to respond online puts him in the minority. Only 2 percent of companies nationwide respond to false rumors spread through chat rooms or online message boards, according to a 1998 survey by the Vienna, Va.-based National Investor Relations Institute.

But attorney Bruce Fischman of the Miami law firm Fischman, Harvey & Dutton tells firms to go on the offensive.

"If someone is going to speak, they need to speak responsibly. Just because the speech is on the Internet doesn't elevate it to some higher standard than the speech that would be in a newspaper or if someone got up in the town square and started spouting off," said Fischman, who has worked with Laser Vision and other national firms.

The First Amendment does not protect Internet message board posters from suits brought by private companies, because in those cases, it is not the government acting to suppress speech, said Matt LeMieux, executive director of the American Civil Liberties Union of Eastern Missouri. Still, LeMieux has concerns about the growing number of such suits.

"Certainly it might tend to stifle the free exchange of views and opinions. As a a matter of public policy, you don't want people to be afraid to say something," he said.

Not all companies dislike the message boards. David Andersen, senior vice president for communications at Charter Communications Inc., views the message boards as "the democratization of information."

Sometimes, outside investors have good ideas, said William Canfield, president and chief executive of Talx Corp. and an occasional poster on the Yahoo! site for Talx.

At its 1999 annual meeting, Talx provided special name tags and meeting space for people who regularly post on the Yahoo! site, and the company plans to do so again this year, Canfield said.

Copyright 2000 American City Business Journals Inc.