Monex Deposit Co. v. Gilliam [1]

On March 4, 2009, Monex Deposit Company and Monex Credit Company (collectively "Monex"), two companies in the precious metals business, filed a lawsuit suit against Jason Gilliam, Richard Gilliam, and Steven Bowman for publishing allegedly defamatory statements on the website MonexFRAUD.com and attempting to extort money from Monex.  Monex initially sued in California state court, but the Gilliams removed the case to federal court.

In its complaint, Monex claims that the Gilliams and Bowman threatened to "continue to libel Monex on their website, . . . share information with government regulators, and . . . interfere with Monex's relationships with investors and banks" unless the company paid them $15 million dollars.  According the complaint, the defendants called Monex's president a "ruthless sociopath" and the firm's sales pitch "flat-out lies," in addition to other comments.  Monex alleges that the defendants made these false statements on MonexFRAUD.com and in comments posted on other websites, including YouTube and Digg.

In addition to defamation and extortion, Monex's complaint alleges cyberpiracy, unfair competition, racketeering, interference with contract, attempted conversion, trade libel, interference with prospective economic advantage, and trade secret misappropriation. The Gilliams, father and son, allegedly lost approximately $32,000 with Monex.  On March 16, Jason Gilliam filed counter claims against Monex, including racketeering and breach of fiduciary duties.

On March 24, 2009, a federal court in California granted Monex's request for a temporary restraining order against the Gilliams and Bowman, expiring on April 7, 2009. The temporary restraining order prohibits them from taking any steps to extort money from Monex by (1) threatening to publish information about Monex on any forum or share information about Monex with third parties, or (2) threatening to defame Monex or its employees.  The order also barred them from retaining, disclosing, or using any Monex trade secret or proprietary information. 

The court also ordered the Gilliams and Bowman to show cause why a preliminary injunction should not issue, continuing the terms of the temporary restraining order until judgment or dismissal.  If granted, the preliminary injunction would also bar the defendants from "publishing or republishing any negative statements about Monex on any website" and require them to "remove, from any website over which they have sufficient control, all negative material about Monex that they have published or republished there, and to stop using the word MonexFRAUD."  It would also bar them from operating the MonexFRAUD website or any "other websites critical of Monex."  

Update:

04/09/09 -The court issued a preliminary injunction [2], prohibiting the defendants from (1) making any efforts to extort money from Monex by threatening to publish or share information about Monex or defame Monex or its employees; (2) operating www.MonexFRAUD.com or any other website using the Monex name in combination with any modifier that implies illegal, unlawful or unethical conduct; (3) publishing or republishing on any website, including www.MonexFRAUD.com, any statement that "Monex does not have title to or the ability to deliver precious metals sold under contract to any Monex customer; that Monex was expelled from the National Futures Association for fraud; that Monex operates a boiler room; that Monex violates any federal or state statutes regulating the business operations of Monex; that Monex has been charged by the Internal Revenue Service with tax evasion; and that Monex fails to accurately disclose to customers account and trading terms (collectively "Prohibited Statements"); (4) disclosing, using, or retaining any trade secret documentation or other proprietary information belonging to Monex.  The injunction also requires the defendants to remove all previously published Prohibited Statements within 24 hours.  It does not prohibit the defendants from (a) making statements regarding their own business dealings with Monex, including losses they have sustained; or (b) communicating with any governmental entity concerning matters within the scope of that entity's legislative, administrative, or regulatory responsibilities.

05/07/2009- Monex filed an amended complaint [3] in district court.