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Bruce D. Fischman, Esq. Fischman, Harvey & Dutton, P.A. fhdlaw

CyberSmear Campaigns: Internet Defamation and the Anonymous Battleground 27 th Annual Media Law Conference. Bruce D. Fischman, Esq. Fischman, Harvey & Dutton, P.A. www.fhdlaw.com. A big $ problem for public companies.

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Bruce D. Fischman, Esq. Fischman, Harvey & Dutton, P.A. fhdlaw

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  1. CyberSmear Campaigns: Internet Defamation and the Anonymous Battleground27th Annual Media Law Conference Bruce D. Fischman, Esq.Fischman, Harvey & Dutton, P.A.www.fhdlaw.com

  2. A big $ problem for public companies • Internet defamation is a cyber-crime that can cause more damage than computer viruses and Internet fraud combined. • Statistically, online attacks against companies, their products and officers account for damages in the billions of dollars annually.

  3. Message board posters attack companies on boards such as: Yahoo Finance Raging Bull Motley Fool Silicon Investor Other Investment Websites/Newsgroups Message BoardAttacks

  4. Increase in Traffic to Message Boards Message board traffic has increased exponentially the past few years with the explosive growth of the Internet. There is a huge susceptible audience for these online attacks: • Yahoo has over 192 million registered users • Raging Bull has over 4.4 million registered users • Silicon Investor serves 2 million users a month • Motley Fool serves millions of investors monthly

  5. Finding John Doe • The first challenge facing counsel is to find out who authored the message. • Methods used are cyber fingerprinting and John Doe lawsuits. • Counsel must also profile the motivation of the attacker since your client’s response may be guided by those motives

  6. Profiles of The anonymous Online Attackers • Disgruntled current or ex-employees of BestWare • Disgruntled shareholders • CyberCriminal afraid of implications of BestWare’s program hitting the market • Short sellers of BestWare’s stock • Employees/paid bashers from rival software companies • Personal vendetta against company or executives • Individual searching for attention

  7. Actual Examples of CyberDefamation • CEO had criminal record of child molestation • CEO was busted in prostitution sting • CEO and executives were members of Mafia crime family • Poster was having an affair with CEO’s wife • Company’s product killed several people • CEO had unofficially resigned (stock dropped 20% over following 48 hours) • Company was declaring bankruptcy next week

  8. Increase in Sophistication of Attacks Online bashers are becoming increasingly more sophisticated in the nature of their attacks. Techniques employed by these individuals include: • Multiple aliases with slightly differing opinions that ‘talk’ to each other • Using securities terminology and well-researched information to lend legitimacy • Claiming inside information • Adopting a neutral or slightly positive attitude for credibility, then ‘changing their mind’

  9. AnswerThink Amway Bigsmart.com Credit Suisse First Boston E*Trade Fruit of the Loom HealthSouth Hvide Marine Integrated Health Services LaserVision Centers Lehman Bros MGM Lucent New York Stock Exchange Osage Owens Corning PhyCor Raytheon Rite Aid Spacelabs Viad Corp. Weirton Steel Companies Victimized by CyberDefamation

  10. Solutions • Employee Internet Policy – Counsel should recommend policies governing utilization of the Internet and intranet both on and off premises. • Preparing for the Attack – Clients should monitor Internet forums for online attacks. • Public Response – Due to strict securities laws, a public response to the attack should be conducted only under the supervision of counsel. • Identifying the Anonymous Poster – Use cyberfingerprinting or subpoenas. • Be realistic, not idealistic in dealing with ISPs • Legal Action – Amend John Doe suit to name the individual defamer. Final resolution by trial or settlement.

  11. Modification of CDA needed • Currently, the service providers and portals have almost absolute immunity for the messages posted by others. • Don’t sue Yahoo! or AOL for the messages published by others on their boards - it’s a waste of time. • Legislative change is needed to require them to preserve identifying data about the publishers and avoid information dumping.

  12. Fischman,Harvey, &Dutton, P.A.Attorneys @ Lawwww.fhdlaw.com

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