Smart Glasses Maker Vuzix Sues Financial Writer Over 'Short and Distort' Articles

Smart glasses company Vuzix filed a defamation lawsuit against Richard Pearson in New York State Supreme Court Thursday, alleging two articles Pearson wrote contain false, misleading and defamatory statements. The company seeks $80 million in damages. Vuzix alleged Pearson published “false and defamatory ‘short and distort’” articles in Moxreports.com and Seeking Alpha to drive the share price down after taking a short position in the company. As a direct result of Pearson’s articles last month, Vuzix shares dropped 30 percent to $5.15, said the complaint. In the Seeking Alpha article titled “Vuzix: Far Worse Than Anyone Had Imagined,” Pearson cited a “massive promotion campaign on Vuzix” by IRTH Communications in which 30 media outlets gave “effusive reviews of Vuzix's Blade all based very visibly” on Alexa-enabled features. The articles appeared as "news" with no disclosure of payment. “NONE of the journalists could get the critical Alexa feature to function, yet precisely ALL of them aggressively touted ‘Alexa’ in reviews,” said Pearson. Vuzix “aggressively spread its own ‘news’ via website and social media, sharply inflating stock price to raise $30 million,” he said, saying “promoters behind Vuzix and tied to Vuzix’ head of IR have been tied to an extensive string of imploded stock frauds.” The company said it has 66 patents and it cited its three-year supply agreement with Toshiba (see 1803120014). Intel bought $24.8 million in Series A preferred stock in January 2015, it said. Pearson had 5,195 followers on Seeking Alpha Friday; the Vuzix article was listed as an editor’s pick. Pearson didn’t comment Friday.