Case Essential To Protecting Analysts From Issuer Retaliation
SCOTTSDALE, Ariz.–(BUSINESS WIRE)–Gradient Analytics, Inc. said today that a California state court has ruled that discovery may proceed in the Overstock.com vs. Gradient, et al. litigation. Discovery had been stayed for several months while motions to dismiss by several parties were pending. The motions to dismiss (which did not involve Gradient) were filed by four current and former Overstock board members who had been sued in a cross-complaint filed by Rocker Partners (now known as Copper River Partners).
In response to the court’s decision allowing discovery to go forward, Gradient Analytics President and CEO Brad Forst today noted that:
“Gradient looks forward to proceeding with discovery and vindicating itself in a court of law. Despite the fanciful allegations being made by Mr. Byrne and other Overstock representatives in the press, we believe that once the actual evidence is presented to a jury in a courtroom, it will conclude exactly what the marketplace has already concluded about Overstock, and will also agree with the SEC’s determination last year that Gradient engaged in absolutely no inappropriate conduct.”
Gradient remains committed to combating the problem of issuer retaliation against securities analysts. Commenting on the general problem of issuer retaliation, Gradient Co-Founder, Donn Vickrey, stated that:
“Overstock’s efforts to retaliate against those who express a contrary opinion are illustrative of the escalating problem of issuer retaliation against securities analysts, journalists and other critics and observers of the securities industry. Issuer retaliation poses a very significant threat to the integrity of our capital markets by discouraging the free flow of information about publicly traded companies.”
Vickrey added that:
“The global research settlement of 2002 has failed to provide investors with the objective opinions needed to make rational and informed decisions. To this day ‘sell’ ratings account for less than 6% of all sell-side ratings, despite a severe deterioration in fundamentals and economic conditions. Meanwhile, the independent analysts that fill the gap by providing contrary viewpoints are under attack by issuers who don’t like their opinions.”
Overstock.com remains under investigation by the SEC with regard to its prior accounting practices, its lawsuit against Gradient, and other matters. The other publicly traded issuer about whom Gradient was critical and who also filed a retaliatory lawsuit against Gradient (Biovail Corporation), recently paid $10 million to settle SEC accounting fraud charges, and four of its former senior executives continue to face pending charges from the SEC. Both Biovail and these same former senior executives also remain under investigation by the Ontario Securities Commission.
About Gradient Analytics
Gradient is one of the Country’s leading independent research firms providing objective, academically-rigorous research and quantitative stock ratings for institutional clients.