Here's their release.

One of the leading websites monitoring the mortgage loan crisis that is unhinging world financial markets is under attack in the courts by a lending agency, Loan Center of California, because an alleged claim in an anonymous email from whistle-blower charging that the company was collapsing, as well as a variety of impropriety charges. Although the general claims were reasonably supported by both public and private evidence available to ml-implode at the time, the lawsuit aims to silence the work of a widely-read, web-based independent financial news outlet, which is now scrambing to raise legal costs.


Krowne explains that the web site is run on a shoestring, with the workload shouldered by him (in addition to a full-time job), a partner, and a free-lance contractor, all working part-time. In spite of this, reports contributed by the public (the majority) are only posted if there are multiple independent sources corroborating a claim. This was the case with the whistleblower's tip on LCC.

Krowne says that in accordance with standard operating procedure, the post was marked as doubtful immediately after LCC complained. However, the company refused to send in a correction for unknown reasons, demanding the information be removed entirely. Krowne says ml-implode relented within a day, and removed the posting from the web page.

However, LCC surprised the site by filing a lawsuit a few weeks later, blaming Krowne and ml-implode for the loss of about $3.8 million in funding, and requesting damages of at least $50,000. LCC did not disclose whether the funding was restored, or explain why major investment banks Credit Suisse and Washington Mutual (the creditors) were not themselves responsible for any business injury LCC suffered. The suit implies the banks acted against solely based on information on the ml-implode site, despite the prominent disclaimers advising otherwise.

Krowne and ml-implode have thus far pursued an "anti-SLAPP" defense, which would provide for early dismissal of the suit and award the defendant legal costs. However, last Friday Judge Franklin Taft denied this motion in a ruling that casts doubt on the state's ability to abide by its own anti-SLAPP statute. The ruling states that the site "is not an index" (even though this is clearly what it is) and that the submitted letter had been "transformed" (even though it was posted verbatim). The ruling did not address the issue of the site's disclaimers, which amply explained the meaning of the "imploded" list and imperfect nature of the information on the site. The ruling also did not consider the defendent's immediate flagging of the item as "doubtful" and its rapid removal within a day.

Krowne says the site is considering seeking an appeal of the anti-SLAPP denial decision. Failing that, the case would proceed to litigation, which Krowne is optimistic about, saying that the site acted reasonably and responsibly, within the best of its abilities. However, Krowne urges that the community's support is needed to pay for the case.

MI-implode.com has had more than 4.5 million visits since January 1, 2007, according to the site meter on the web page. Currently 105 lending operations are listed as "imploded".

Please pass this release along to financial journalists and media freedom groups.

 

 

 

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