Wanted Poster: A Bounty on the Internet

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He is a wanted man.

And even though there's a bounty on his head, his routine is regular: Every day at 6:30 a.m. Pacific Time, he takes his seat in his home office, dressed in boxer shorts with a steaming cup of coffee in his hand, fires up his Level 2 Nasdaq trading station to check his portfolio -- and then logs onto

Silicon Investor

to find out who is on his trail.

When I find him there, online, he won't tell me his city or the state, but says cryptically -- or perhaps optimistically -- that every morning he looks out on a blue sky.

"Pluvia" is his online name. "Cheers, Steve" is his tag line. His real name, however, is a closely guarded secret. Though he'd written hundreds of careful postings on Silicon Investor and

The Motley Fool

, he remained a quiet, anonymous presence online. But last Wednesday, Aug. 20, a $5,000 reward was offered to anyone who could find out who he really is.

John Westergaard

,

eminence grise

of

Westergaard Online

, offered a $5,000 reward on an Internet page sounding like a wanted poster from the old West: "Westergaard Internet Broadcasting Network (WIBN) posts a $5,000 bounty for information on 'Steve Pluvia', the Silicon Investor Registered Pen Name of a person, or persons, circulating disinformation designed to drive down the price of

Premier Laser Systems

(PLSIA)

common shares."

"I was very mad," Pluvia tells me (once he's called me, vetted our editor and I've convinced him that I'm not a bounty hunter). "All of a sudden, I had many people emailing me and

Instant Messaging me, telling me I had a bounty out on my head. I was thrown off balance. Somehow, people got my phone number and I started to get calls from people I didn't know, asking strange questions about my business."

The following day, Aug. 21, a new thread appeared on the Silicon Investor saying: "I believe all of us in the SI community should stand behind Pluvia, regardless of how we feel about Premier Laser, as this slanderous attack is aimed directly at the investor's ability to get or give their views on stocks, something only recently with the evolution of the Internet, we've been able to do."

And that's when the dust-up began. "Pluvia vs. Westergaard" has since generated more than 400 postings, some rabidly defending Pluvia, others questioning his motives and his right to anonymity. The thread has rapidly evolved into a vociferous debate on the issues of free speech and anonymity and their application to the world of Internet investors.

The discussion waged was intense, perhaps because Westergaard's charges were so intense to begin with. He threw down the gauntlet: "WIBN... has been designed to continually sweep the Internet to identify parties such as 'Steve Pluvia' engaged in circulating rumors, fraudulent or intentionally misleading investment information or analysis for financial gain, competitive advantage or other purposes."

Now Westergaard backs off some of those charges. "I'm not saying he's fraudulent," Westergaard says from his midtown Manhattan office. "But it is twisted and intentionally misleading. We intend to address his motives, and to do that, we have to find out who he is." That this may have a chilling effect on Internet posters, well, that's the point.

What Westergaard keeps quiet is that he's accepted at least $30,000 from Premier Laser Systems -- and this service goes well beyond Westergaard recommending PLSIA as a "must own" last year on his Web site.

"Cash payment? Well, yes, Premier Laser Systems is what we call a member affiliate of what we are now calling The Westergaard Broadcasting Network," says Westergaard. "You see, we will be leasing member affiliate cyberstations. These will be comprehensive value-added investment information."

You mean, a Web site?

"Well, yes, it's a site," he says. "But it'll be a state-of-the-art site able to automatically aggregate information worldwide from the Internet. And then we will have the Westergaard Cyberpatrol, or the WBN Cyberpatrol. The Cyberpatrol will be monitoring the Internet, at all hours, to attempt to identify any evidence of hostile information being presented -- any information; hostile, fraudulent, misleading, rumormongering... We will immediately put on the case a rapid response team which will attempt to identify the source of the information. Our lawyers will be contacting the service and identify those individuals. I think we're on to something pretty big here, Cory."

Westergaard says he has no problem with his quiet role of taking money from publicly traded companies and then writing stories about them and recommending their stock. "We consider that by accepting their lease payments that we do have a fiduciary relationship to the company," says Westergaard. "But we consider that comparable to an investment bank. Yes, we're paid by the same way a

Morgan Stanley

or a

Goldman Sachs

is paid."

The online debate evolved without the knowledge that Westergaard is Premier Laser's paid gun. But even so, most posters came to side with Pluvia's right to post whatever he wanted. "I can be very harsh on my posts," says Pluvia. "But I try to be careful. I try to use quotes from SEC fillings and news releases. And I try to differentiate between my opinions and the facts. If I think a CEO is hyping something, I'll use her stuff in quotes and let the readers decide what they think.

"But his attack on me is outrageous on three different levels. If I was outright wrong, he still doesn't have the right to post a bounty on my head. The reward in and of itself insinuates criminal activity. I wasn't circulating rumors, I was posting opinions based on fact."

After a week of this, Pluvia decided to "turn himself in" and collect Westergaard's bounty (he's offered to let the thread posters choose the charity his $5,000 will go towards -- the current front-runner is an impoverished school in Kenya). He also put up a lengthy posting laying out some new facts -- including his role as a seller of

Ion Laser Technology

(ILT)

products that compete with Premier Laser.

(As originally published, this story erroneously said Pluvia held a "position as a salesman for" ILT products. ILT says Pluvia is a customer of, not a salesman of or agent for, the company.)

"I don't own any stock in ILT, I don't own any stock in PLSIA," wrote Pluvia. "I don't have a short position in PLSIA and I never have had one. The idea that I have some sort of financial motivation to drive down PLSIA stock is absurd."

Westergaard has thus far declined to pay Pluvia the five grand -- which will surely be fodder for more postings. Pluvia thinks Premier Laser Systems and Westergaard have done "a great deal of damage to my Pluvia identity, and my real identity is exposed to that same risk." Pluvia says he has talked to lawyers about potential legal action. But for now he's waiting on his 5 Gs. And through it all, Westergaard is out drumming up new clients for his Broadcasting Network.

As for paying people to chase down his client's critics? "Frankly we've scared the willies out of this man," says Westergaard. "He's engaged directly in promoting the business of a competitor. He has a vested interest in damaging the reputation of Premier Laser and its products thereby. We have considered that a fundamental violation of appropriate discourse. And that is our goal: to stop people from doing this kind of thing."

CyberCache,

a collection of stories from the world of Internet investing, appears every other week.

This story was originally published on Aug. 28.