Defending the Nom do Plume - Industry Trend or Event

It's like Goliath taking David to court. When companies are maligned -- or just plain miffed -- by anonymous postings on Internet stock message boards, they routinely go to court to find out who authored them. Now a case in federal appeals court could determine whether message-board pundits have a right to keep their identities hidden.

Last week, the Florida appeals court heard arguments in the libel case brought by Erik Hvide, former chief executive of marine vessel operator Hvide Marine, against several "John Does." Beginning in 1998, the unnamed defendants posted critical missives about Hvide Marine and its erstwhile CEO to Yahoo Finance message boards. A Florida judge originally ruled that two of the defendants in the case could not keep their names secret. The appeals court decision is expected in several weeks.

"There are very few of these cases that have resulted in a decision," says David Sobel, general counsel of the nonprofit Electronic Privacy Information Center in Washington. "This is an important case." The suit is adding to an already growing debate in privacy and legal circles over whether the operators of message boards should comply with what some call obvious methods to stifle negative remarks.

Last week, several individuals who posted messages on Raging Bull were notified that the site had been subpoenaed for their personal information in connection with suits filed by TheBigHub.com, a Texas-based search engine, and one of its backers, Robert J. McNulty.

One of the individuals, Tom Amenta, a Philadelphia businessman who uses the alias "taigolf," says he lost $20,000 on TheBigHub's stock and posted only one negative message out of about 50. "This is outrageous," Amenta says. "I never shorted the stock and I never was a basher." Attorneys for TheBigHub didn't return calls for comment.

Raging Bull policy is to turn over information once the company receives a subpoena. Raging Bull also alerts posters that it's about to do so.

The challenge for the court in the Hvide case, says Sobel, is to distinguish stock manipulators from those who are simply, expressing their opinion on a stock. "Someone who has made a fair and legal criticism of a publicly traded company should have a way to have their anonymity protected," Sobel says.

For now, at least, a bearish investor is as bad as a stock manipulator in the courts.

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