Libel Suit OK’d for Financial Reports
Posted May 31, 2007 7:07 AM CST
By Debra Cassens Weiss
A California appeals court is permitting Overstock.com’s libel suit against a financial analysis company to go forward.
Overstock.com had claimed Gradient Analytics conspired with a hedge fund to publish negative reports about the online retailer, according to the Recorder. The hedge fund allegedly profited by taking short positions in the stock.
Gradient had contended the suit should be dismissed as a Strategic Lawsuit Against Public Participation, which is barred under California law, the legal newspaper says.
But the 1st District Court of Appeal ruled (PDF) that the plaintiff had established a prima facie case based on the declaration of an ex-employee who said Gradient, formerly Camelback Research Alliance Inc., included negative information in its reports if customers requested it.
Gradient said in a press release it would ask the California Supreme Court to hear the case.