FAU - To Our Resident Basher
Augen and Mason sue over Stockhouse postings
2011-07-26 13:53 ET - Street Wire
by Mike Caswell
Augen Gold Corp. and its chief executive officer, David Mason, have filed a defamation lawsuit in the Supreme Court of British Columbia against three Stockhouse posters over messages that accused Mr. Mason of running Augen for his own benefit, among other things. The company claims that the posters, whose identities are unknown, authored at least 38 defamatory statements between January and May, 2011. The messages called Mr. Mason many names and wrongly accused him of collecting excessive management fees, the suit states.
The suit comes just weeks after Augen received an all-stock takeover bid from Trelawney Mining and Exploration Inc. that valued the company at 32 cents. Although shareholders with 42 per cent of the company agreed to support the offer, Augen itself has yet to support or oppose the bid. Supporters could include a dissident group that failed to unseat Mr. Mason and his board at the company's Sept. 30, 2010, annual general meeting. At the time, the group complained that the company lacked "solid leadership."
Augen's notice of claim
Augen launched the case on July 21, 2011, when it filed a notice of claim against three John Does at the Vancouver courthouse. Most of the 11-page suit quotes messages that the three left on a Stockhouse forum devoted to Augen. The first set was posted under the alias "WhattheF."
One post, dated March 11, 2011, read: "Mason would do anything to prevent TRR from making an offer for GLD! If that happened, he would be out of a job and would lose his fee raping opportunities." Another, dated March 8, 2011, read: "Thanks to Mason we have an extra 45 million shares in the pool. When he had his summer proxy battle ... he ran out and sold cheap stock to get some additional votes ... again at our expense."
A March 6, 2011, message by WhattheF accused Mr. Mason of being dishonest, the suit states. It read: "I do not know who your source is regarding Mason ... I can tell you first hand that his reputation is as follows: he is a liar ... he will look you in the eye, promise you a deal with a hand shake and then deny he every [sic] agreed to do the deal."
The second set of posts the suit complains of, which appeared around January, 2011, were under the alias "beachman." One, dated Jan. 27, 2011, read, "Companies like GLD, which appears to be strictly promotional, will use SGH surveys as a promotional tool and to justify exploration and even drilling in areas that really should be considered moose pasture."
Another, dated Feb. 10, 2011, stated: "GLD is an area play and 99.9% of the time area plays are basically pump and dump promotional plays. That's my opinion and it's based on experience and knowledge. I have no inside information."
The final set that the suit complains of appeared under the alias "Clchan." One post, dated Oct. 5, 2010, read: "This company is simply operating to generate management fees ... This is the down side to a junior mining player like GLD. It becomes a management cash grab at our expense."
A Nov. 10, 2010, message by the same user read: "The biggest challenge facing both v.TTR [Trelawney] and v.GLD [Augen] shareholders is the David Mason factor. He does not have much of a holding in v.GLD and is earning a good living charging fees for rasing funds and running v.GLD. He will not have any interest in any merger that would remove his role."
As Mr. Mason sees it, the statements by the three posters meant that he was not qualified to run Augen and was motivated primarily by self-interest. They also meant that he was dishonest and untrustworthy and had improperly promoted the company.
The posters knew that their statements were false and they wrote them with "ill will," the suit states. The messages were part of an effort to damage the reputations of both Augen and Mr. Mason.
The suit seeks damages for libel, punitive and special damages, plus court costs and interest. It also seeks an order permanently barring the defendants from publishing further defamatory material. Vancouver lawyer Owen James of Fraser Milner Casgrain LLP filed the suit on behalf of Augen and Mr. Mason. None of the defendants have responded.
In conjunction with the suit, Augen filed an application seeking to compel Stockhouse to provide it with the IP addresses that the posters used. A judge has not yet ruled on that application.