Financial cyber-bullying: Firms fear organised web abuse

As a CEO, David Bramhill could handle the online attacks on his looks and his character.

"You get used to the personal stuff that goes up: 'Fat bastard,' etc.," says the burly one-time boxer and oil industry veteran. "I don't like it but I suppose being in the position I'm in, OK, they can take pot shots at me."

But when the messages on internet bulletin boards became a concerted campaign of criticism against his oil and gas exploration company, Bramhill snapped.

"When it comes to dishonesty, and not running the company the way it should be run, and spreading untrue rumours - this is where we've got major, major issues," a disillusioned Bramhill said in early September.

Bramhill's experience is part of a bigger story of insults and untruths involving a clutch of firms listed on AIM, London's junior stock market.

According to the companies, they are victims of a kind of financial cyber-bullying in which discussions among investors on internet bulletin boards have turned abusive.

Executives of the targeted companies, typically small and often in commodities, suspect an organised hand may be directing those behind the comments - and then cashing in on the reaction.

The incidents expose a lack of effective regulation of investment chat boards as well as the huge impact anonymous posters can have on smaller companies and people's lives.

Soon after Bramhill spoke, the 59-year old, who also received physical threats from people posting on investment message boards, announced his retirement.

The company he led, Nighthawk Energy, invested $30 million (18.7 million Euro) in its US-based projects over the last financial year and was earlier this month rated a 'buy' by Goldman Sachs.

Frustrated with a lack of action by Britain's market regulator, which says such cases are difficult to police and a low priority, Nighthawk, fellow AIM-listed oil explorer Nostra Terra and several other small companies have considered legal action against message board-posters, who typically use multiple aliases to disguise their identity.

In rulings that have emboldened the companies, Britain's High Court granted orders to both Nighthawk and Nostra Terra this year giving them the right to order message boards to disclose the identities of those behind the disparaging remarks.

The issue is not unique to Britain.

Companies in the United States have also complained about message board users, though there the right to free speech provides significant protection for posters.

Not so in Canada, where last March small cap resources firm Farallon Mining Ltd won damages of $425,000 against a user of online site Stockhouse. It was the biggest defamation payout ever awarded against a single person in Canada.

"The bulletin board becomes the tail wagging the bloody company," Bramhill says. "There was one particular theme of dishonesty in the company, of projects not being correct. We're aware of all this stuff. It's all a load of baloney and you try not to look at it but people send you it and ask, 'What are you going to do about it?'"

Another executive said that his company has found one individual posting defamatory comments using 22 different aliases.

"We believe there is a network behind it that's trading and manipulating and they're using him as the front," says the executive, who spoke on condition of anonymity because the company is pursuing the investigation. "We want to get the bigger fish -... otherwise we would have taken him down already."

Image: A screen shows the home page of the Advanced Financial Network (ADVFN) website November 18, 2010.

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