Silvercorp Metals Inc. (SVM), a Canadian miner of silver in China, sued two websites and their operators for allegedly spreading false information in an effort to drive down the company’s stock price.
Chinastockwatch.com, a New York-based website that posts reports on public companies, and operator Jerry Katz published “false, defamatory and fraudulent statements,” Silvercorp said in the complaint filed yesterday in New York State Supreme Court in Manhattan.
Alfredlittle.com website operator Alfred Little and an editor, Simon Moore, also were named as defendants in the lawsuit. Silvercorp seeks punitive damages of at least $10 million and compensatory damages of more than $1 million.
The defendants sought “to artificially drive down the price of Silvercorp common stock in order to obtain illicit profits on short sales,” the Vancouver-based company said in the complaint. Short investors sell borrowed shares with plans to buy them back later at a lower price.
No contact information was listed on Chinastockwatch.com and Katz couldn’t be reached to comment on the lawsuit. The complaint is “frivolous” and Alfredlittle.com has “nothing to do with” Chinastockwatch.com, Moore said.
“Every statement that was made in every single report that was published on Silvercorp from Alfredlittle.com is completely factual,” Moore said in a telephone interview. “Absolutely nothing in any of our previous reports on other companies that we’ve published on including Silvercorp has ever been exaggerated.”
The case is Silvercorp Metals Inc. (SVM) v. Chinastockwatch.com, New York State Supreme Court, New York County (Manhattan), 150374/2011.
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