Careful What You Post On Stockhouse....

Farallon countersued by Stockhouse poster "campokid"
Ticker Symbol: C:FAN

Farallon countersued by Stockhouse poster "campokid"

Farallon Mining Ltd (C:FAN)
Shares Issued 475,879,417
Last Close 11/26/2010 $0.78
Monday November 29 2010 - Street Wire

by Mike Caswell

David St. Eloi, the Australian poker player facing a defamation lawsuit from Farallon Mining Ltd., has filed a countersuit against the company. He claims, among other things, that Farallon's suit has interfered with his ability to earn a living, as he can no longer bluff other players at the poker table. He also says that the case should be dismissed, as Farallon has a history of using lawsuits to silence those who criticize the company.

Farallon and its president, Dick Whittington, are suing Mr. St. Eloi for 32 posts on Stockhouse. The posts stated that the company was "the biggest scam since bre-x," and they referred to Mr. Whittington as "tricky dicky."

While Farallon launched the case on Sept. 1, 2009, Mr. St. Eloi did not participate until the company won a default judgment against him on Jan. 5, 2010. He appeared before a judge in Vancouver in May and successfully had the default overturned. He then filed a statement of defence, in which he denied any wrongdoing, and said that he relied on factual information in writing his posts.

Now, with his counterclaim, Mr. St. Eloi contends that Farallon uses so-called SLAPP cases (strategic lawsuit against public participation) to silence on-line critics. Prior suits the company has filed against on-line posters include one against Robert Butler, an Edmonton man who was ordered to pay $425,000 to Farallon after he accused the company of stealing its Campo Morado property in Mexico. Another similar suit, against an Edmonton couple, awaits trial. Mr. St. Eloi says the judge should dismiss the case against him, and should award him damages for stress and worry.

Farallon's statement of claim

Mr. St. Eloi's legal troubles began on Sept. 1, 2009, when Farallon filed a statement of claim against him in the Supreme Court of British Columbia. The claim identified Mr. St. Eloi as a resident of Australia, although later documents in the case indicated that he had lived in B.C. for at least 20 years.

The suit described how Mr. St. Eloi, using the alias "campokid," authored a series of posts in June and July, 2009, that accused the company of stealing its Campo Morado property in Mexico. The posts frequently referred to a dispute the company had with a man named David Hermiston, who once held an interest in the property.

The first post was dated June 4, 2009. It read, "it looks like this property was stolen from mr. hermiston, unless of course you just think mr. hermiston is a nice guy and handed over his legacy. i'm surprised nobody is in jail.... YET." Another, posted the same day, stated, "if i was a FAN shareholder, I don't think I would be able to sleep at night, knowing that i was part of the biggest scam since bre-x."

A June 15 post accused Farallon of engaging in a fraud on the justice system in Mexico, according to the suit. It read, "10 to 1 farallon releases more fantastic news this week and no spike in price, as the insiders bail. it won't be me holding onto worthless stock certifacates. dam it. i forgot, farallon just got 30 mil ... i hope it's gonna take more than 30 mil to buy these judges."

Farallon said the posts meant that the company had engaged in theft, bribery and stock fraud. The company sought an injunction preventing future posts, plus damages for libel and court costs. The case was filed on the company's behalf by Tom Hakemi of Hakemi & Company.

Farallon filed an amended version of the suit on Aug. 26, 2010. It included several quotes from Mr. St. Eloi's posts, which had previously been included as an appendix. It also quoted an entry from Stockwatch's comment section. The comment, which was under a Sept. 4, 2009, Street Wire about the original lawsuit, read: "this company FAN. Has been misleading shareholders for years, and if they have the guts to go to trial, i am going to expose them all. tricky. yoo hoo, bernie needs a cell mate....lol.....the CAMPOKID.." The post meant that Farallon and Mr. Whittington had engaged in stock and other frauds on investors, the amended suit stated.

St. Eloi's response

Mr. St. Eloi filed his response to Farallon's amended claim on Oct. 14, 2010. He prepared the document himself, without the benefit of a lawyer. In his response, he mostly argues that the facts in his posts are true, and denies that Farallon is entitled to any damages.

One of the issues in the case, as he sees it, is the ownership of the Campo Morado property. Mr. St. Eloi claims that Farallon is not the legal owner of Campo Morado, and that the company is aware that title to the property is a disputed issue. He also contends the courts in Mexico have found that individuals in that country fraudulently deprived Mr. Hermiston of the property. According to Mr. St. Eloi, his posts were "expressions of his honestly held opinions."

Mr. St. Eloi further argues that in at least one instance, the statement of claim quoted a post out of context. For example, the post in which he said "it looks like this property was stolen from mr. hermiston" originally began with the words "in my opinion." It was also addressed to another poster, and "needs to be taken in context of the spirit of a bullboard question and response format," Mr. St. Eloi says. He defends calling Mr. Whittington "tricky dicky" as being part of the "hyperbole satirical format of the bullboard at that time."

In response to the message in Stockwatch's comment section, Mr. St. Eloi says that he does not have exclusive control over the name "campokid." He also contends that there are "more salacious comments" by other posters.

St. Eloi's counterclaim

In his counterclaim, Mr. St. Eloi accuses Farallon of "extrinsic and intrinsic fraud." He spends much of the document describing how he walked out of his pretrial discovery in Vancouver after he was not satisfied with the documents that Farallon's lawyer had presented to him. Discovery sessions allow both parties to ask questions of the other side before a trial, and occur without a judge. Mr. St. Eloi claims that the other side presented documents to him that he had not had a chance to review. "After a heated discussion by all parties," Mr. St. Eloi left the discovery hearing.

Mr. St. Eloi claims that he is entitled to exemplary and punitive damages as a result of the discovery. He says that Farallon was so deceitful in presenting its exhibits that its conduct "should offend the courts [sic] sense of right and wrong."

In addition, Mr. St. Eloi seeks general damages, citing the immense stress and worry the case has caused him, which has extended to his poker game. "The defamation claim has affected his capacity to bluff, the reaction of other players to his strategy at the tables as it has been implied that he is a liar," the counterclaim reads.

Farallon filed a brief response to the counterclaim on Nov. 8, 2010, in which it denies causing Mr. St. Eloi any of the grief he alleges. The company says the counterclaim should be dismissed, as it discloses no reasonable action and is unnecessary, scandalous, frivolous or vexatious.

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