I just received the letter below by email, in reference to my previous post on Shannon Terry and Rivals.com. I’m not going to make a statement on this just yet – our lawyers are involved and have advised me to keep quiet for now.
I’ll say this much, though. Rivals is no longer my favorite sports news site.
Update (11:42 pm PST 4/13/08): I am still not prepared to respond directly to the letter below. However, I do want to reach out directly to Shannon Terry and say this: I offer you the opportunity to to respond in writing to my initial post and refute any fact or opinion that is stated in that post. I will publish your unedited response here on TechCrunch, giving it full and equal publicity to the original post. In fact, I’ll leave it up on the top of page one for a full 24 hours, and you can choose the day you would like it published. It will remain permanently on TechCrunch and will have a distinct URL. It can be any length you feel is appropriate, and you can link to whatever supporting documents you like.
Amazing.
Good Luck to her
A Curse on Inflammatory Shock Journalism
Wow… I can feel the righteous indignation all the way over here!
freedom of speech anyone?
So, were you wrong or what?
what’s most shocking about all this is that….Shannon Terry is a dude.
Wow! Thats one hell of a lawsuit! No probs Mike, even if you accede to their demands, I know what my favorite sports site is .. rather I know what my fav sports site isnt
Man that was fast…
I wish I had lawyers like that. He must be paying them good $$$
He’s pissed off? That sounds defamatory too!
this site is becoming dramacrunch
Is it too late to write this article up as the “Worst TechCrunch Article” and win those tickets to the show?
he’s using the same lawyer he had 10 years ago http://www.busi.../24/b353114.htm
Another recent SEC enforcement action could end up setting legal boundaries for actions against online newsletters. In mid-May, the agency alleged in a lawsuit that Shannon Terry, a writer for another Internet newsletter, SGA Goldstar Research, ran afoul of the securities laws by netting $850,000 in free stock for touting Systems of Excellence–whose former chairman was recently jailed for stock fraud–as well as 17 other stocks. Terry’s lawyer, S. Lawrence Polk, says that he is vigorously contesting these allegations.
If the Terry case is litigated, it might well resolve a crucial issue–how much people can say about investments on the Internet without running afoul of the law. Chelekis and SGA both disclosed that companies pay to get their names on their Web sites. But the SEC has asserted that newsletters must disclose the specific payments they receive for each stock. ”The SEC has never issued regulations saying exactly what you have to disclose,” Polk maintains. Despite the SEC’s actions against Chelekis and SGA, other newsletters on the Web often fail to disclose how much they get from companies that they feature on their Web sites.
I was wondering about this when I first read the post. This was very very fast though.
Mjdgard – freedom of speach doesn’t apply to defamatory statements, ask your lawyer if you don’t know that. The evening news anchor can’t just go around calling people crooks because it’s their own personal opinion.
If you blogger “reporters” want your work to be treated like real news, then you better learn how to do it right or this will continue to be what it currently is – amature hour.
” An employee of SGA Goldstar Research, Shannon Terry, was found to have violated the anti-touting and antifraud provisions of securities laws by a U.S. District judge. The court ordered Terry to disgorge $828,000 of trading profits.”
http://www.bizf.../1999-07/deals/
After reading the letter, I kind of have to agree with what’s said.
I mean, what was the point of the original article anyways if it wasn’t a strategically timed attempt to ruin the potential deal with Yahoo?
Unless he/she HAD kept the information from Yahoo and it HAD screwed up the deal, I don’t see anything newsworthy about that article – nothing happened so what are you reporting on?
Arrington – stick to reporting whats actually happening and quit using your soapbox to influence people’s decisions / opinions. Sometimes its better to just let sleeping dogs lie.
I like item #4 in the letter, where the lawyer says “no such allegation was ever made against Mr. Terry in 1998.” Can you say “ever” and “in 1998″ in the same statement? Why stipulate “in 1998″? No get on with the business of “governing yourself” (???), pronto!
Also, in item #1, I saw no implication whatsoever in your piece titles that the acts were committed while he was the Rival CEO; titles merely stated that the Rival CEO, which he is, had some kind of connection to securities fraud, which it appears he did. If publishers can in fact be sued for misleading or ambiguous titles or leads (the purpose of which is ALWAYS to generate enough interest on the reader’s part to continue with the entire article), I would have to surmise that almost every publication in America would no longer be in business.
“On November 7, 1996, the Commission
filed a Complaint and obtained emergency relief against Huttoe and twelve
other defendants, including SGA Goldstar Research, Inc., which disseminated
a tout sheet over the internet, and its principals, Theodore R. Melcher,
Jr. and Shannon B. Terry. See SEC v. Huttoe, Et Al., 96-CV-02543
(GK)(D.D.C.). Kraft was responsible for introducing Huttoe to SGA
Goldstar. The Complaint alleged a massive ongoing market manipulation
orchestrated by Huttoe in which he executed an unregistered distribution of
tens of millions of SOE shares. The Complaint further alleged that Huttoe
artificially inflated the price for those shares by issuing materially
false press releases about nonexistent multimillion dollar sales of SOE
products, filing false periodic reports with the Commission, and bribing
with SOE stock persons to tout SOE stock, including Melcher and Terry. As
a final part of the scheme, Huttoe, Melcher, and Terry then took advantage
of the inflated market by dumping shares on unwitting investors. On
January 29, 1997, the Commission amended the Complaint to allege that in
addition to touting SOE stock, SGA Goldstar, Melcher, and Terry engaged in a systematic practice of publishing promotional coverage for other issuers
in exchange for compensation…The actions against SGA
Goldstar, Melcher, and Terry are pending.
“Yahoo walks from Rivals deal; acquires TechCrunch instead”
(before I get sued, this is a joke)
Mike – so if the Rivals sale to Yahoo falls through does that mean you’ll have to pony up $100M? We could start a collection.
#6 DoubleUTF–I just want you to know that I spewed coffee from-ith my mouth all over my brand new, beautiful Apple 23″ flat screen when I read your “dude” comment! Thanks for the laugh. But you suck for ruining my flat screen.
mike, maybe you should quickly sell techcrunch to doubleclick, on the strength of your new, as of yet not launched ad content unit, the crunchAD. Then you’d be set when the $3.1 Billion deal goog’s announcing for doublelick closes.
ouch — those comments sited in the letter. it amazes me how effortlessly people will type comments like that and hit “submit” when they really aren’t informed and they may be further damaging someone’s reputation. people do bad things (note to Shannon’s attorney: I’m not implying that Shannon did bad things, just “people” in general). And, sometimes people change (Michael Milken anyone?).
One should not toss around character assassinations as if they are picking lint from their belly button. There’s a big difference.
That said, it is interesting to read between the lines as to what Shannon’s attorney didn’t have a problem with — notably the statements that his past employment at a company that had employees seemingly involved in a scam might have torpedoed past deals.
Man, Friday the 13th definately ain’t lucky for you Michael!
This makes you officially the Perez Hilton of Tech
Truth is a defense in defamation cases. I hope your facts are right, mike.
DoubleUTF – funny.
Andy (11), thank you for the laugh. Does Tennessee law apply to TechCrunch? I’m not up-to-date on my blog civil procedure. Juridiction aside, it’s difficult for a public figure to prove defamation. Does Tennesee have an easier standard of proof than actual malice?
Well, I don’t necessarily think TechCrunch is the reason why Terry’s background might have killed the deal with Yahoo. It sounds like Terry handled that one all on his own.
Mich please stand up – Your doing great I hope you can hold up – and keep that post up as long as possible-
– I think – as long as his points are correct; his actions were his own defamations.
- I wish they would have quoted me saying “Can felons have guns” .. Cause that guy shoudnt be allowed to have big business relations
OUCH!!!!!!
Hey, thanks for sharing the legal notice – really interesting and good luck.
Luckily you didn’t call Mr. Terry a “nappy headed ho” or you’d be out of a crunch job!?!
dang.
Is there any way to avoid some controversy by not publishing this kind of information on TechCrunch? I ask only because I read your blog every single day and have done so for quite a while. Please correct me if I’m wrong; but I feel that the most relevant news is about exciting startups and new technologies. The information about lawsuits, especially when it generates a lot of controversy, just ends up being drama. I’m sure TechCrunch loyals would be up in arms when I say this: Can you really make a concerted effort to not disclose this kind of information? The style of presenting this information also makes it seem very dramatic and as if you’re breaking news. And indeed, the incident itself may be dramatic and you may be breaking news; but is it really worth it? Not for readers like me — and I think considering your readers’ feelings on this is important although it is your blog and you can write whatever you want. Just a request …
I just went through the letter. Let’s take these one by one:
1. says you are saying that the fraud was in connection with his job at Rivals. Wrong. You were clear about the facts. Note that the lawyer admits to the fraud in that paragraph.
2. saying he wasn’t actually legally found to be involved in a pump and dump scheme. Ok, change “was found to have been involved” to “was involved” since he clearly was.
3. he was an employee, not a principal. Ok, change to employee.
4. just change to “was found to have violated the anti-touting and antifraud provisions of securities laws by a U.S. District judge. The court ordered Terry to disgorge $828,000 of trading profits.” which is a quote from one of your links.
5. say that the others were sentenced to prison terms. Let everyone figure out on their own why he was the only one who didn’t go to prison.
6. a link to an SEC thing that names Shannon is wrong. Please.
7. you say you have a source for this, and you are relying on that source. so…
This guy is (or was) a major crook. He should be hiding in shame, not quibbling over details.
The potential lawsuit is not as shocking as the fact that Tennessee has a legal code. Michael, you’re screwed!
I find it interesting that the letter takes some of the comments out of context.
“If a CEO’s past is sinking any potential acquisition deal (assuming that acquisition is a possible goal for the company) then it’s time to get a new CEO.”
I didn’t bother to hunt for the other comments. But the removal of the context of this quote makes it appear that the author is stating that Rivals.com needs a new CEO. Instead, the comment is a general statement that if a CEO is reducing shareholder value, that CEO needs to be replaced. The statement doesn’t call out Rivals.com, Yahoo, Apple, or anyone else.
It’s a perfectly valid point and doesn’t seem to reflect specifically on Mr. Terry.
I wonder how much the lawyer is reaching on the other allegations as well?
Somehow I took a wrong turn and ended up at the Player Hater’s Ball.
@#37, congrats, you just added yourself to a defamation lawsuit…
@#15; “If you blogger “reporters” want your work to be treated like real news, then you better learn how to do it right or this will continue to be what it currently is – amature hour.”
The irony is astonishing…
that’s odd, I thought Terry’s lawfirm was Dewey, Cheatham, and Howe.
wocka wocka wocka
ggmike – “what was the point of the original article anyways if it wasn’t a strategically timed attempt to ruin the potential deal with Yahoo?”
You gotta learn to read these lawyer letters with a grain of salt. They are supposed to sound convincing. But for you or anyone to buy the line that somehow TC was trying to manipulate the deal by reporting on it is to buy that line of reasoning without stepping back to ask an important question: “Could TC somehow benefit by the deal not going through.”
TC has gone out of the way to present full disclosure in all other posts, and if I recall Arrington has a law degree, so we hope he would be smart enough not to ruin all that he has built by doing something so stupid as somehow trying to make a quick buck of a deal collapsing. And besides, how can someone profit on a deal _not_ happening when the target company isn’t public?
It’s interesting that the lawyer who penned that letter appears — in my opinion… don’t sue me — to be operating from a context that anything published must be done so for the purpose of manipulation of a market, and can’t understand the idea of publishing just for the point of illumination. I guess if you spend all day defending clients accused of manipulating markets, it would be easy to see how that might become your world view.
That’s just my constitutionally protected opinion.
Last I knew, this was America, and our freedom of speech and of the press was, you know, protected and such. All this BS is is pretty much politics, and someone throwing a fit. Jeez, get over it. Is it really worth it? Really? =\
Mind your own business.
Shannon Terry…you sir are an ass.
I thought we divested Tennessee from the union to the French.
Boy, don’t you love lawyers:)
Who wins here? Answer, Larry the lawyer. He can now go home and tell his wife that he can log another 50 hours @ $300 per hour and get a step closer to making Partner.
Lawyers, lawyers…..
Remember the joke – what’s 1,000,000 lawyers at the bottom of the ocean? Answer, a good start!
This letter just makes me want to have an early Friday martini. What a pain in the ass.
For TechCrunch’s sake I would pray that they actually sue TC. It will make this blog mainstream overnight.
Imagine a blog having the potential to make or break deals
Thats power
Exactly what #8 said!
Mike you missed the best stuff in your original post. See
http://classact...96/lr15153.html
” revenue projections for SOE that were
without any basis. The Complaint also alleges that as further
efforts to inflate the price of SOE securities, Huttoe caused SOE
to fail to file required periodic reports and to file false
periodic reports with the Commission, and bribed SGA with stock
to recommend SOE to subscribers to SGA’s electronically
disseminated tout sheet. The Commission alleges that Huttoe
caused unregistered but free trading shares to be issued to
Melcher and Terry, SGA’s principals, some of which were issued in
the names of Alpha and Dunbar, entities they control.”
and (this is good):
“Complaint further alleges that as the third step in the scheme,
Huttoe, Melcher, and Terry then took advantage of the inflated
market for SOE stock that they had created by dumping their own
SOE stock on unwitting investors. The Commission alleges that
those sales were timed to take advantage of the false news
concerning SOE, and were heaviest when SOE stock reached its
highs in June, 1996. The Commission alleges that as a result of
this scheme, the defendants obtained illegal proceeds of more
than $10 million.”
- then it talks about the “massive coverup” attempt afterwards.