NEW YORK (MainStreet) The marijuana penny stock Terra Tech is preparing a lawsuit against Anson Funds in Toronto for allegedly making libelous statements about the company to members of the Clark County Commission in Nevada who were considering 79 applicants for 18 grow licenses.
"They were repeatedly emailing commissioners, giving them false information about our company," said Terra Tech CEO Derek Peterson. "They claimed the FBI had raided our offices, which isn't true."
Under its subsidiary MediFarm, Terra Tech is moving forward in applying for production and cultivation permits within Clark County, North Las Vegas and Reno as well as dispensaries in Clark County, Reno and the City of Las Vegas.
"We were specifically told by one commissioner that he voted against licensing us because of the information that had landed there from detractors however we still applied at the state level because if they don't rank applications in the same way that the local level does, we could be in a position to have another chance at those permits," Peterson told MainStreet.
Legal counsel for Terra Tech plans a civil suit based on tortious interference, which is the act of using false information to disrupt another person or entity's ability to do business. "When investors are short a stock, they profit when the price drops but taking deliberate action to force a company's stock price to drop could violate securities law as well as several civil laws," said Peterson.
Terra Tech has also been under attack online by a Twitter user named @Laughinpaulryan whose true identity Peterson believes is a man by the name of Norman Gates.
One tweet stated that a Terra Tech board member was sentenced to jail, according to Peterson.
"This is a reflection on people who engage in unethical business practices," said Tae Darnell, cannabis legal expert. "As with any new and exciting industry there are people who will do anything to cash in. Unfortunately, integrity gets thrown out the door for the cash prize. It's shameful that any of this goes on."
Terra Tech is not alone in feeling slighted. 420 Investor Founder Alan Brochstein has the Twitter handle @LaughinPaulRyan on ignore.
"If you look at this Twitter feed, you'll see this guy spends a great deal of time bashing me and 420 Investor," Brochstein told MainStreet. "He lists his occupation as shareholder of Medical Marijuana Inc., which was one of the first stocks that traded in the sector, but he's a fanatic about it."
Brochstein and Peterson suspect that the person behind @LaughinPaulRyan may be working with Sunny Puri, an analyst with Anson Funds, according to LinkedIn.
"The information that Sunny sent to commissioners was similar in nature to what @LaughinPaulRyan wrote, which lead us to believe this slander was a joint effort," said Peterson. "Gates is in New Jersey, but it is our belief that Sunny has enlisted the help of people to disseminate negative information about our company for financial reasons."
Slander involves knowingly making a false statement about another that does damage to that person's reputation and depends largely on whether the insulted party is a private or public figure.
"A public corporation definitely falls in the public category," Darnell told MainStreet. "When you have innocent shareholders falling victim to devaluation because someone knowingly lied, there may be both civil and criminal liability."
--Written by Juliette Fairley for MainStreet