4 ms·

Hypothetical question: Let's say a news source writes a story that tanks a company's stock price and then, over the course of time the company is able to prove

Hypothetical question: Let's say a news source writes a story that tanks a company's stock price and then, over the course of time the company is able to prove the story is false and/or the news source is unable to back up the story. Can the company sue the newspaper for damages?

staticautomatic 7y ago
I work in the law and I'm not 100% sure what the case law is on this but my guess is that if you could prove that they knew (or should have known) what they were publishing was false, then yes. First amendment lawyers please correct me if I'm wrong.
- testvox 7y ago
  Yeah in general if the untrue statement was made without at least negligence then it will be protected. > Statements made in a good faith and reasonable belief that they were true are generally treated the same as true statements; however, the court may inquire into the reasonableness of the belief. The degree of care expected will vary with the nature of the defendant: an ordinary person might safely rely on a single newspaper report, while the newspaper would be expected to carefully check multiple sources.
nradov 7y ago
Even if the company can prove that the newspaper engaged in libel it would be difficult to establish compensatory damages. Regardless of stock price changes, the company hasn't lost any assets. They might have a shot at getting legal fees plus some punitive damages depending on how egregious the newspaper's conduct was.
- clhodapp 7y ago
  It would be the shareholders that would have grounds for a suit rather than the company itself, I would think.
- yoz-y 7y ago
  A tanking stock might lose the company some employees though.
danso 7y ago
AMD in this case would likely have to meet the public figure standard of proving defamation, which would mean proving the WSJ was grossly negligent or knowingly published false claims.
- testvox 7y ago
  They are probably not an all-purpose public figure, depending on the particular facts they could end up being considered a limited-purpose public figure. But even private figures must prove at least negligence to have a successful defamation claim.
HeWhoLurksLate 7y ago
Oh, like Bloomberg's The Big Hack?
- closetohome 7y ago
  First thing that came to mind. As far as I know they're still claiming it was accurate.
  - blueboo 7y ago
    And it certainly hasn’t been proven false
    - lame-robot-hoax 7y ago
      I mean they’re the ones making the claim, the onus probandi lies with them.
  - shaklee3 7y ago
    They can claim whatever they want. But they have no proof, and there has been plenty of counter evidence.
- Havoc 7y ago
  Made good money off that one :D
  - marktangotango 7y ago
    Interesting, can you provide more detail?
    - Havoc 7y ago
      Nothing super fancy After their stock crashed there was a small window of time where the tech crowd had concluded the claim is bullshit but the stock didn't go back up. Checked out their financials and that seemed fine so stuck money in it and waited for it to recover
mnky9800n 7y ago
This is basically how Donald Trump tried to make money in the stock market in the 1980s.
Proven 7y ago
> Can the company sue the newspaper for damages? Duh! They can always sue. Unless they can prove malicious intent, they won't win.
d-sc 7y ago
You can generally sue for anything you feel like. However if the press demonstrates that they followed reasonable journalistic practices and weren’t blatantly lying, they’d be fine.
nevi-me 7y ago
I'm not being my answer on any laws, but am replying with the eye of an investor. A story or rumour affecting the short term price of a company stock, might leave little recourse to the company, as that price can return back to what it was relatively quickly. There would have been some reputation damage, but I wouldn't weigh stock price to be a good measure of that. If the company was maybe in the middle of raising funds, say bonds from the market, or using additional shares; they would have stronger case if the false story hindered such find raising. A company is often not affected by short-term fluctuations in its external "value". If in the other hand, there's an investor who was adversely affected by such news, the stock price directly affects them. Perhaps they would have a stronger case. This is my opinion based on my intuition.

staticautomatic 7y ago

I work in the law and I'm not 100% sure what the case law is on this but my guess is that if you could prove that they knew (or should have known) what they were publishing was false, then yes. First amendment lawyers please correct me if I'm wrong.

testvox 7y ago
Yeah in general if the untrue statement was made without at least negligence then it will be protected. > Statements made in a good faith and reasonable belief that they were true are generally treated the same as true statements; however, the court may inquire into the reasonableness of the belief. The degree of care expected will vary with the nature of the defendant: an ordinary person might safely rely on a single newspaper report, while the newspaper would be expected to carefully check multiple sources.

nradov 7y ago

Even if the company can prove that the newspaper engaged in libel it would be difficult to establish compensatory damages. Regardless of stock price changes, the company hasn't lost any assets. They might have a shot at getting legal fees plus some punitive damages depending on how egregious the newspaper's conduct was.

clhodapp 7y ago
It would be the shareholders that would have grounds for a suit rather than the company itself, I would think.
yoz-y 7y ago
A tanking stock might lose the company some employees though.

danso 7y ago

AMD in this case would likely have to meet the public figure standard of proving defamation, which would mean proving the WSJ was grossly negligent or knowingly published false claims.

testvox 7y ago
They are probably not an all-purpose public figure, depending on the particular facts they could end up being considered a limited-purpose public figure. But even private figures must prove at least negligence to have a successful defamation claim.

HeWhoLurksLate 7y ago

Oh, like Bloomberg's The Big Hack?

closetohome 7y ago
First thing that came to mind. As far as I know they're still claiming it was accurate.
- blueboo 7y ago
  And it certainly hasn’t been proven false
  - lame-robot-hoax 7y ago
    I mean they’re the ones making the claim, the onus probandi lies with them.
- shaklee3 7y ago
  They can claim whatever they want. But they have no proof, and there has been plenty of counter evidence.
Havoc 7y ago
Made good money off that one :D
- marktangotango 7y ago
  Interesting, can you provide more detail?
  - Havoc 7y ago
    Nothing super fancy After their stock crashed there was a small window of time where the tech crowd had concluded the claim is bullshit but the stock didn't go back up. Checked out their financials and that seemed fine so stuck money in it and waited for it to recover

mnky9800n 7y ago

This is basically how Donald Trump tried to make money in the stock market in the 1980s.

Proven 7y ago

> Can the company sue the newspaper for damages? Duh! They can always sue. Unless they can prove malicious intent, they won't win.

d-sc 7y ago

You can generally sue for anything you feel like. However if the press demonstrates that they followed reasonable journalistic practices and weren’t blatantly lying, they’d be fine.

nevi-me 7y ago

I'm not being my answer on any laws, but am replying with the eye of an investor. A story or rumour affecting the short term price of a company stock, might leave little recourse to the company, as that price can return back to what it was relatively quickly. There would have been some reputation damage, but I wouldn't weigh stock price to be a good measure of that. If the company was maybe in the middle of raising funds, say bonds from the market, or using additional shares; they would have stronger case if the false story hindered such find raising. A company is often not affected by short-term fluctuations in its external "value". If in the other hand, there's an investor who was adversely affected by such news, the stock price directly affects them. Perhaps they would have a stronger case. This is my opinion based on my intuition.