Internet Critic of Citadel Security Software Maintains Right to Anonymity

May 3, 2005

Internet Critic of Citadel Security Software Maintains Right to Anonymity

Message Board Poster Criticized Illegal Business Practices

WASHINGTON, D.C. – In a victory for free speech on the Internet, Citadel Security Software has dropped a March 2005 lawsuit against an anonymous poster on Yahoo! message boards after the poster complained that Citadel Security Software management had profited at the expense of ordinary investors by dumping nearly 800,000 shares of stock before the company’s stock price collapsed.

Citadel Security Software sued five anonymous posters, alleging defamation and business disparagement, and had asked the District Court of Collin County, Texas, to order Yahoo! to identify the five posters. Citadel Security Software faces several class action suits under securities laws alleging that the company hid bad news while its executives were selling their own stock. Although the dates and volume of the insider trading is undisputed, the company sought to suppress criticism on the Internet message board – a First Amendment violation.

Public Citizen, which has been a strong defender of First Amendment rights on the Internet, represented one of the posters and urged the court to allow the poster to remain anonymous. Citadel sought information that would have infringed upon the poster’s First Amendment right to speak anonymously on the Internet, argued Paul Alan Levy, a Public Citizen attorney. Courts have ruled that subpoenas to reveal the names of anonymous speakers can chill free speech, and those courts have upheld the right to communicate anonymously over the Internet. Further, the suit was filed in the wrong court because the message board poster lives in Minnesota, not Texas.

“We are pleased that Citadel Security Software has stopped this assault on free speech,” Levy said. “Courts across the country have upheld the right for citizens to air their views on the Internet anonymously. The message board poster whom we represented clearly had a First Amendment right to criticize Citadel Security Software on the Web.”

Marc Stanley and Martin Woodward of the Dallas firm of Stanley, Mandel & Iola, LLP, were local counsel for the defendant.

To read Public Citizen’s brief, click here.

###