Rauhauser Manifesto: False Light & Tortious Interference; January 2015

I’ve posted this before but it always makes me laugh when I find it on teh googlez. You can see it in its original form preserved FOREVER on the wayback machine here along with 2 other comments he made
Neal posted his False Light manifesto after CoinFireBlog posted an article announcing that GAWminers was being investigated my the SEC. This post by Neal instigated retaliation against CoinFire and its editor, Mike Johnson. Mike and his staff received numerous threats of death and violence, and Johnson was sent a package containing dead rabbits.

Neal was fired from his writing job because of his comment. And there is a lawsuit but it was filed against GAW and consists of former investors suing the company to recover their money. And of course, CoinFire was correct, not only is there an ongoing investigation by the SEC, but other agencies (FBI, FTC, etc) are investigating as well.


False Light & Tortious Interference

Yesterday I saw the news that there was going to be an SEC investigation of GAW. This morning someone popped up in chat and said that one of the usual suspects had filed a complaint, but that the SEC ishighly unlikely to do anything about a conspiracy theory aimed at a cryptocoin.

If you Google my name you will find a years long stream of character assassination from a neo-Confederate dirtbag named Robert Stacy McCain. Google his name, append the qualifier ‘racist’, and you’ll find the Southern Poverty Law Center’s records on this buffoon. If you visit my personal blog, nealrauhauser on WordPress, you’ll find a ‘First Amendment’ link on the masthead. During December I won a precedent setting case in Texas, having run up a $220,000 legal bill in the process of crushing a frivolous lawsuit from a guy named James McGibney.

McCain & McGibney have a personal relationship, I was not the only person named in the Texas suit, and it appears to have been at least in part a fishing expedition to gather evidence for a RICO suit in Maryland, which another of McCain’s victims is successfully pursuing. It appears the Texas courts are going to award me a $1M sanction to discourage any more frivolous litigation. I believe the RICO suit plaintiff has already extracted at least that much money from some of the defendants who’ve been forced to settle, but these arrangements appear to be sealed, so we’ll never know the details.

I have more experience dealing with trolls, malicious prosecution, and frivolous litigation than most, so I’m going to offer an opinion on how GAW ought to deal with Coinfire & Co. First, let me slip my standard disclaimer in here.

Full disclosure first – I have about 30 XPY, several machines running Paycoin wallets, and a couple of Hashstakers. My other holdings are a pittance, fun money in Coin-Swap. I write for @CryptoCoinsNews but the bulk of my work turns up on Hacked.com, which CCN recently purchased. The sum of my contact with Josh Garza has been one email where he was annoyed about some errors in a story I did for CryptoCoinsNews about the purchase of Coin-Swap. I receive no consideration in any way for posting here.

If someone scribbles a conspiracy theory down on an official form and turns it into a criminal complaint against you, then starts waving the allegations around like they are evidence, this is a form of defamation known as ‘false light’. If the false light does clear and easily explained damage to your business, this is a tort, a civil offense for which one can approach a court to seek assistance in resolving. This is ‘tortious interference’.

The plaintiff who has suffered such injury has to select either state or federal court as the venue for resolving the issue. If there were multiple location diverse defendants federal court would be the correct venue. This seems like a state level case, the question would be whether to file in GAW’s home state, or in Coinfire’s. Garza, as the founder and public face of the company, is certainly a limited purpose public figure in the realm of crypotocurrency, which raises the bar for libel.

The locations should be checked for anti-SLAPP statutes. SLAPP is short for Strategic Lawsuit Against Public Participation, a legislative principle in place in about 60% of all states, which provides a citizen exercising 1st Amendment rights the means to crush any well funded opponent who is trying to silence them. I would expect Coinfire to marshall an anti-SLAPP defense, if such a thing is available in the chosen venue, no matter what the details of the case might be. anti-SLAPP tends to slam the brakes on litigation and force the plaintiff to prove they have a winnable case, rather than a grudge, a conspiracy theory, and a fat wallet.

GAW should be evaluating this SEC investigation troll to see if the conditions are right for a libel suit against the people behind it. A retainer on a case like this would be in the vicinity of $50k – $100k and costs could run to $250k – $500k by the time its done. If such a case is to proceed it will take a minimum of two years, but an injunction against any further disparagement should be sought at once.

Proper litigation, as opposed to a stunt, is a minimalist PR effort at best. GAW/Garza should admit that this is happening right after the case is filed, then respond with “we do not comment on litigation”, and hold to that until something substantial happens.


@msarro The whole death threat thing is an enormous load of horse manure FYI.

There is a site that tracked the happenings in my anti-SLAPP suit last year. The plaintiff and his lawyer both went whining to the court repeatedly, “The anonymous comment on blog X is a death threat, your honor.”

There were never any statements specific enough to qualify as threats, even if they did they are coming from some random Tor exit node, and the site operator is NOT responsible. They went to their local police, too. In each case I talked to the investigating officer. “Wait, you’re going to get a $1,000,000 sanction against this guy? And there is no way to tell who posted that? Well, this is a civil matter then, thanks for solving this problem for me. Case closed.”

So unless someone has an admissible smoking gun email from someone at GAW ordering that person to make that threat, thinking that it’s any other than a minor PR problem for GAW is pretty silly.

“evidence listed in every one of their anti-GAW articles” …. is not evidence, it’s hearsay. I’ve seen about 10,000 pages of junk like that tossed right out of federal court in California last year. The guy who filed that frivolous suit against me in Texas did the same thing to some other people in California, and he got stomped there, too.

This entire situation really sounds like something GAW needs to turn over to a lawyer, and then just not say a word and let the system work.
nrauhauser posted


    I just looked at the “death threat” – it lacks enough specificity to qualify as a threat in the eyes of law enforcement, even if they could identify who made the statement. Attribution in online forums is really tough, unless that person is a total misfit they’re using a foreign VPN or Tor to do stuff like that, and it’s just plain hopeless.

    I would mock & deride endlessly anyone who thinks something like that matters, the source could just as well be Coinfire insiders as anyone else, and given that there is money on the line that is precisely the answer any local cop is going to give.

    And please publicly humiliate anyone who thinks the FBI is some sooper dooper interstate butthurt response force, they care 9,000% less about stuff like this than the least interested local/state LE you can find.