Edward Bukstel, CEO and majority shareholder of VitaminSpice, Inc., a publicly traded company, has brought a libel action in the Eastern District of Pennsylvania against DealFlow Media and affiliated individuals, claiming that DealFlow knowingly published a false story about VitaminSpice. The complaint alleges the following facts.
DealFlow provides independent research services and analysis for finance professionals such as investment managers, law firms, banks, public and private corporations, hedge funds, and financial companies. It publishes The DealFlow Report for individuals and institutions in the field of business and finance. DealFlow’s website asserts that over 6000 institutions rely on it for accurate, comprehensive and timely information about finance.
In early 2013, Bukstel negotiated a deal allegedly worth over $8 million involving the sale of VitaminSpice assets to a New York investor. An article appeared in a March issue of The DealFlow Report, entitled “VitaminSpice CEO Says He Requested Trading Halt Amid Dispute Over Stock Manipulation.” The Article went on to report that Bukstel had accused his former attorney of stock manipulation. According to Bukstel, the Article, its title in bold, appeared on page one of the issue and was the major headline. Bukstel asserts that the defendants intended the article to be conspicuous so that every reader would be drawn to it.
Bukstel claims he never requested a trading halt on VitaminSpice stock and that defendants deliberately falsified the Article to sensationalize a story for the benefit of its readership and with complete disregard for the harm the statements would cause him. When Bukstel learned about the Article, he contacted defendants and informed them that the Article’s title and content were false and that the publication was jeopardizing an $8 million deal. Bukstel told the defendants that VitaminSpice investors were contacting him with concerns, and he asked DealFlow to issue a press release with a retraction and apology. Bukstel hoped such a release would restore investor confidence and salvage the sale.
The complaint alleges that DealFlow acknowledged the falsity of the title but did not issue the requested press release. Rather, the defendants simply changed the title to “VitaminSpice Halted Amid Dispute Between CEO, Attorney Over Stock Manipulation” and the opening line to “The chief executive of the microcap company VitaminSpice Inc. (VTMS) says that he provided a document to the Securities and Exchange Commission…” According to Bukstel, these changes were made only to the online versions of the Article after the print edition had been sent to thousands of subscribers.
Bukstel sued DealFlow, its CEO, Editor and a journalist working for DealFlow for defamation and intentional interference with contractual relations. According to the complaint, Bukstel has more than 18 years of experience in data integration, data security and communications. Bukstel asserts that he was nominated for a humanitarian award by the Department of Defense, has been a national speaker on electronic data interchange and a guest lecturer at The Wharton Business School and holds a B.S. and a PhD. As the CEO of VitaminSpice, Bukstel claims that his professional reputation is essential to maintaining the confidence and morale of his fellow officers, directors, employees and shareholders and is important to potential investors and future shareholders who rely on the reputation of corporate officers in their investment decisions.
Bukstel contends that defendants intentionally published defamatory and libelous statements about him. He argues that the defamatory meaning of the statements is self-evident because the statements are false. Bukstel asserts that the article created skepticism among VitaminSpice investors and potential investors by creating the impression that he was in dereliction of his fiduciary duty to VitaminSpice and that it harmed employee and shareholder confidence and morale. Bukstel claims to have suffered embarrassment, reputational damage and emotional distress as well as the opportunity to complete the $8 million sale of VitaminSpice assets. He contends that the individual defendants acted outside the scope of their duties as officers or employees of DealFlow. As of this writing, the defendants have not yet responded to the suit.