online comments / South agency

This article appears in the March 2021 issue of Investment ExecutiveSubscribe to the print edition, read the digital edition or read the articles online.

Anonymous online comments disparaging a publicly traded company have come back to bite a man years after he made the comments.

According to a court ruling, Matthew Singer used his internet message board pseudonym “Truenorthstrong” to make several remarks about Theralase Technologies Inc. in the summer of 2015, including some comments that labelled the pharmaceutical research and development company a “pump and dump scheme” led by a management team of “liars.”

In court documents filed after Singer was identified, he said he believed the comments at the time and made them “without much thought, and in passing.” But now those comments have cost him dearly after Ontario Superior Court Justice Frederick Myers found the postings defamatory and ordered Singer to pay Theralase $35,000.

Singer, who has more than 25 years of experience in the financial services and investment management industries (the judgment stated he works at Toronto-based Aviso Wealth Inc.), declined to comment for this story.

Justice Myers cited Singer’s industry experience in the ruling: “Mr. Singer is not a nerdy teenager sitting in his parents’ basement [role]-playing as a self-aggrandized internet troll. He is a seasoned professional in the investment industry who says he believed that he was free to publish anonymous comments accusing people in the public markets of illegal conduct.”

Toronto lawyer Fraser Dickson, a partner at Weintraub Erskine Huang LLP who acted for Theralase in the litigation, said he and his client were pleased with the court’s ruling.

“We’re thrilled that [Theralase’s] reputation continues to be vindicated,” Dickson said. “We had to jump through quite a few hoops to get here.”

Theralase, which is listed on the TSX Venture Exchange, launched legal action in 2019 that alleged defamation by 12 posters who made comments about the company via an internet chat forum attached to

After Theralase obtained a court order for to turn over its users’ details, the pharmaceutical company was allowed to serve notice of the legal action to the defendants via email, but only one of those
people — Charles Lanter — responded and identified himself. Theralase recognized another poster as a former employee. That left 10 defendants unidentified, including Truenorthstrong, Singer’s alter ego.

In a landmark judgment, Justice Myers granted Theralase’s motion for default judgment against all 10 of the anonymous defendants, ruling in January 2020 that the emailed service was enough to notify the defendants of the proceedings and give the court jurisdiction over them.

The court found that Truenorthstrong’s five online posts about Theralase — which, the ruling noted, were read between 59 and 238 times by other users — were defamatory and ordered Singer to pay general damages of $35,000.

“These posts were pointedly aimed to warn investors away from investing in Theralase. They were intended to impair the company’s ability to raise capital while conducting its research and development activities,” the ruling stated. “A ‘pump and dump’ scheme is illegal. The allegation is serious and designed to be harmful.”

The lawyers involved in the case could find only one previous Canadian case in which a court had granted final judgment against a party before they could be identified, although the plaintiff in that matter never discovered the real name of the anonymous defendant.

However, Theralase was determined to pursue enforcement of its judgment.

Almost a year after receiving an email with Justice Myers’ ruling against him, Singer moved to have the default judgment set aside, claiming in court that he hadn’t taken the proceedings against him seriously before because he thought they were a scam. A reference to his place of work in one of the emails changed his mind and prompted him to contact a lawyer, he added.

Singer told the court he believed the forum “was a place for investors to post freely about stocks purchased” and that as an investor in Theralase, he “only ever hoped for the stock to go up, not down.”

Justice Myers was not impressed, denying Singer a fresh shot at defending Theralase’s claim in a Feb. 5 ruling.

“To allow Mr. Singer to re-open this case now, after the hoops he has forced the plaintiffs through, would be an abuse of process. It would give power to the worst risks created by anonymous posters,” the ruling stated. “Telling anonymous posters that they can ignore legal proceedings until the plaintiffs have spent years and tens of thousands of dollars to methodically unearth their hidden identities, but then, once they are exposed, they get to undo all the steps taken while they were hiding, creates all the wrong incentives toward anonymous postings and ignoring proceedings.”

According to Dickson, Theralase was pleased with the return on its investment in the litigation: “When it comes to investment decisions, your reputation is of significant importance, for both monetary and non-monetary reasons. So, while there is a sense in which it was a costly process and it took a long time, I think Theralase was glad to get some accountability.”

Brian Radnoff, a partner and defamation lawyer with Dickinson Wright PLLC in Toronto, said the odds remain largely stacked against plaintiffs targeted by anonymous commenters, but he welcomed Justice Myers’ rulings.

“It’s a very positive result for people who are being defamed on the internet, because it creates more risk for these anonymous bloggers and posters who think they can get away with saying what they want just because it’s hard to find out who they are,” Radnoff said. “Normally, the best a plaintiff can hope for is that the host of the website will take down the information.”

However, Simon Morris, partner with Morris & Morris LLP in Toronto who defended Lanter — the single Theralase commenter who identified himself from the outset — said he is uncomfortable with judgments issued against anonymous posters on the strength of emailed service.

“If you serve 12 people with a statement of claim in the normal way, usually 12 will defend [themselves] because they understand it’s real money,” Morris said. “If you sue 12 people and 11 don’t respond, some large question marks arise as to why [they didn’t respond].”

Morris said some statements of claim may have been sent to email addresses that were made up or “used once many years ago.” In addition, he questioned the fairness of allowing only his client the chance of a hearing on the merits of the case, in which Morris plans to raise Ontario’s legislation against lawsuits designed to intimidate critics (known as anti-SLAPP legislation). Morris also pointed to an Ontario Securities Commission settlement in which Theralase admitted to disclosure deficiencies related to one of its products.

“What will happen if this kind of case circulates is people will stop posting,” Morris said. “Why would the average investor ever put in their two cents if they’re potentially exposing themselves by saying anything negative?”

However, Howard Winkler, a defamation lawyer in Toronto, said forcing internet users to think before commenting anonymously would not be a bad thing.

“Defamatory comments can have a devastating impact on businesses and, by extension, those who are investing in those businesses,” Winkler said. “The day of accountability has arrived, and you’re not going to be able to hide behind a pseudonym. People should comment in their own name or as if their own name can be discovered, and if you aren’t prepared to take ownership of those comments, then you should question whether you should be making them at all.”

In his February ruling, Justice Myers wrote: “It can be safely assumed that Mr. Singer would not have made his defamatory posts if he had had to sign his name and identify his important position.”