Friday, February 12, 2010

Shaquille O'Neal, Meet Barbra Streisand

Shaq's lawyer wants a blogger to STFU

I must confess at the outset that I don't know a thing about basketball, nor am I much of a fan of Barbra Streisand. However, I would like to use this post in order to introduce Shaquille O'Neal to Ms. Streisand, as the basketball star's effort to silence a blogger is a classic case of the Streisand Effect.

In 2003, Ms. Streisand sued a photographer who photographed her Malibu home from an airplane. As The Guardian recounts in its article on this phenomenon:

In striving to protect her privacy, however, the actor only stirred up outrage among internet users – nearly half a million of whom looked up the offending image over a single month. And so, as Barbra might say, A Rule Was Born – that when a celebrity tries to take information off the internet, the selfsame nugget will receive exponentially more attention.
Now, Shaquille O'Neal is not suing anybody. But a gent identifying himself as Shaq's "general counsel," a lawyer in Los Angeles by the name of Dennis A. Roach, yesterday wrote what is known in the legal biz as a "cease and desist letter" to a blogger named Tim Sykes, who runs a blog that can be found at

Tim focuses on penny stocks--he has a system that, he says, can produce profits from the trading of same--and he has been bearing down on a stock called NXT Nutritionals Holdings Inc. The stock symbol is NXTH.

I repeat, the stock is called NXT Nutritionals Holdings Inc. And its symbol is NXTH.

OK, I just wanted to be sure you noticed that.

Anyway, I have never heard of the stock and have no opinion on it. But in past blog posts, which you can find here. Tim has referred to NXTH as a "pump and dump," and has pointed out that the aforementioned Mr. O'Neal is its official spokesman. One post pointed out:

By the end of 2012, regulatory filings show, NXTH must give O’Neal 3 million shares of company stock in exchange for his publicity services. He was scheduled to receive the first 1 million shares back in November, filings show, and can start selling them at the beginning of February. At that point, he will be free to sell up to 20,000 NXTH shares a day (but no more than 100,000 shares a month) if he chooses to do so.

Clearly, NXTH could face some intense selling pressure – potentially crushing ordinary shareholders – if private investors like O’Neal start dumping their stock next month.

C’mon Shaq, aren’t you rich enough? Don’t you have any better financial advisors than your current ones who got you into bed with such snakes?
He went on to call the company a "blatant pump and dump."

Along comes Roach. Now, keep in mind that he does not represent the party that would presumably be offended by being called a "pump and dump," which is NXT Nutritional Holdings Inc. He represents O'Neal.

In his letter, Roach contends that in a Feb. 7 post entitled "Shaquille O’Neal’s Alleged Pump & Dump Is Up Nearly 100% Due To This $320,000 Promotional Mailer" (he added the word "alleged" to the title after getting the Roach letter). . .
. . .you state that Mr. O'Neal is involved in a pump and dump scheme. . . As you well know, 'pump and dump' is a fraudulent activity, consequently your public statements are false and defamatory, and greatly damage [sic] to Mr. O'Neal's reputation.
The Roach letter goes on to "demand that you immediately remove all of these postings from your website, blogs, Twitter accounts and any other form of public dissemination."

The letter says that time is of the essence, and these here posts gotta come down now!

It's a tough little letter with one deficiency: it doesn't point out anything inaccurate in Tim's blog posts.

Tim published another post today, you can find it here, asking, "Is This Shaquille O’Neal Penny Stock A Pump & Dump? Help Me Decide!"
. . . trust me when I say if you get a threatening letter (the first you’ve ever received in 2+ years writing this blog) from one of the richest and most powerful athletes in the world, no matter how true your statements are, you think about taking your little blog post down ASAP.

But as I reread my post I was reminded again of the importance of publically exposing pump and dumps and that I was providing my readers with information that was 100% true and supported by the publicly available sources which I quoted…after all, it’s not my fault that Shaq and/or his attorneys don’t understand that NXT Nutritionals Holdings Inc. (NXTH) looks very much like a pump & dump…perhaps if I educate them, while educating everyone else through this blog, perhaps then, the threats would disappear and Shaq and his attorneys, would not threaten me, but instead thank and congratulate me for teaching them, as everyone else does.
And on it goes. As for me, I've got a lot better things to do, but I'm now very interested in this little company and this big guy.

Shaquille O'Neal, meet Barbra Streisand.

© 2010 Gary Weiss. All rights reserved.

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