Golf Associate Files Libel Suit Against Business Journal

Arkansas Business Publishing Group, one of its publications and three individuals associated with the publishing company were named as defendants in a $12 million libel suit filed Feb. 25 in Washington County Circuit Court.

The plaintiff is Mel Robinson, a trustee for Genesis Trust, a Washington County entity that is a major shareholder in a Springdale penny stock company called Golf Entertainment Inc. Golf Entertainment is under a rare cease-and-desist order and is being investigated by the Arkansas Securities Department.

Golf Entertainment stock, which trades over-the-counter as GECC, was on Feb. 26 trading at a third of a penny per share for a total market capitalization of $67,000.

The suit seeks $8 million in actual damages and $4 million in punitive damages for at least 25 articles that appeared in the Northwest Arkansas Business Journal, Arkansas Business and Arkansasbusiness.com beginning in August 2002. Among other things, the suit claims that ABPG and the Business Journal are “fictitious entities of some sort.”

Robinson was named in only five of the articles, and two of the references were direct quotes from the Securities Department order. Robinson’s suit, however, maintains that all of the articles were designed to “further the prior libels of the plaintiff.”

Robinson alleges that Jeffrey Wood, editor of the Business Journal, was “operating in concert with a known stock manipulator” when he wrote an in-depth report detailing apparent violations of Securities and Exchange Commission regulations by Golf Entertainment.

The suit also alleges that Wood, ABPG Chairman and CEO Olivia Farrell and ABPG President Jeff Hankins “have each maliciously, knowingly, willfully, deliberately, recklessly, wantonly and illegally asserted, maintained and published words and figures which are libelous of plaintiff, and which operate to invade the privacy of the plaintiff and cast plaintiff in a false light.”

Another unusual claim recently made in writing to the Business Journal came from John Dodge, general counsel of Golf. He accused the publication of forging a police booking photo of fellow company officer Jim Bolt. The photo ran in the original Aug. 19 in-depth report on Golf and was obtained by the publication through a routine Freedom of Information Act request made in person at the Benton County Sheriff’s department.

According to public records, Bolt has three convictions on six felony counts dating back to 1975. Robinson was in 1994 convicted in California federal court of fraudulently selling liability insurance to trucking companies. He was found guilty of one count of conspiracy, 13 counts of mail fraud and 15 counts of wire fraud and received a 30-month prison term.

Hankins said the Business Journal initiated reporting of Golf Entertainment and the closely aligned Genesis Trust only after Golf officials invited news coverage by issuing several press releases on company activities. The articles that were subsequently published were based on public records, including filings with the Securities and Exchange Commission, and personal interviews.

Hankins said a lawsuit was not unexpected.

“We knew all along that the individuals involved with Golf Entertainment were litigious, but we felt and still feel that it was our duty to inform the investing public of the irregularities in their operation. A libel suit is never welcome, but we stand by Jeff Wood and his reporting,” Hankins said.

“When you’re reporting on a publicly traded company that sues state securities regulators, you know that anything can happen.”

On May 6, 2002, Golf Entertainment settled a federal lawsuit filed by the Genesis Trust just six days earlier by issuing to the trust 15 million unrestricted shares — tripling the number of shares outstanding and apparently giving away control of the company.

The shares were later the subject of a cease-and-desist order by the Arkansas Securities Department because they were not properly registered.

Although Robinson described himself in the libel suit as a “volunteer” trustee for Genesis, the Securities Department’s investigation specifically found that Robinson personally received shares of Golf Entertainment stock from the Genesis account.

After a hearing in which Arkansas Securities Commissioner Michael Johnson affirmed his department’s order that Golf Entertainment and Genesis Trust stop trading the settlement shares in Arkansas, Golf filed a lawsuit in which it accused the department of trying to manipulate its stock price.

Golf Entertainment, which also operates under the name Sienna Broadcasting, has a pending federal suit in which it alleges racketeering by a long list of “stock manipulators” who posted unflattering comments about the company on the Internet.