iMergent CEO accuses Stocklemon.com of libel

The top executive of Orem-based iMergent Inc. has filed a $15 million libel and defamation lawsuit in what his attorney said is intended to be a test case for Web sites that "profess to be consumer watchdog sites."

The suit, filed in Los Angeles Superior Court by iMergent's chairman and chief executive officer, Don Danks, names as defendants Stocklemon.com and its principals. In addition to the $15 million, the suit also seeks punitive damages to be determined later.

The suit's claims include assertions of false, misleading and damaging allegations published on the Internet that damaged Danks' reputation and standing as iMergent's CEO. Other allegations include violations of California corporate code, conspiracy and infliction of emotional distress.

"The information published by Stocklemon.com is false, misleading and has been emotionally and financially devastating to me, my family, employees of iMergent as well as the majority of stockholders of iMergent," Danks said in a prepared statement.

He said he is wiling to take the case to trial, if necessary, in part "to demonstrate that one cannot publish defamatory information for financial gain without consequences. I have conducted my entire professional career honestly and ethically and to be personally targeted like this by Stocklemon.com will not be tolerated."

IMergent itself has been the target of litigation recently. Several suits have been filed seeking class-action status in federal court in Utah. The suits against iMergent and certain officers and directors allege federal securities laws violations for issuing misleading information. At least one suit seeks class-action status for people who bought iMergent securities between Nov. 30, 2004, and Feb. 25.

The company was sued in February by the attorney general of Texas, who claims the company, through subsidiary StoresOnline.com, violated Texas law by engaging in "false, deceptive and misleading acts and practices." That suit claims people who attended StoresOnline seminars about starting an Internet business were left with worthless software and asked to pay more money for further assistance.

The company has said those cases are without merit.

Stocklemon.com's Web site is chock full of criticism of Danks and iMergent. "Stocklemon believes that iMergent Inc. is not only attempting to deceive . . . potential customers through a variety of channels, but it is also trying to deceive the investment community by fostering an image of its corporate history and business model that is inconsistent with documented facts," it said on its home page Tuesday.