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I just saw this story about the CEO of Rivals

Discussion in 'Journalism topics only' started by PalmettoStatesport, Jun 21, 2007.

  1. Rumors about a possible $100 million acquisition by Yahoo of sports content site Rivals surfaced today. But two previous deals to acquire the company died once it was discovered that the CEO, Shannon Terry, was found to have been involved in a classic “pump and dump” scheme, and violated the anti-touting and antifraud provisions of U.S. securities laws in 1998.

    Shannon was a principal of SGA Goldstar Research, Inc. In 1998, he and at least two others, Sheldon Kraft and Charles Huttoe, were accused of engaging in “a massive ongoing market manipulation” around touting shares of a company called Systems of Excellence, Inc. Kraft and Huttoe were sentenced to prison terms. Shannon, who reportedly “cooperated” with authorities, got off with a $828,000 fine. For background information, see here and here.

    In 2005, sources say, Fox killed a deal to acquire Rivals at the 11th hour after a routine background check on Terry revealed the fraud. Terry had not previously disclosed the issue to Fox. Fox went on to acquire competitor Scout Media for $60 million in September 2005.

    Shortly thereafter, AOL was supposedly close to acquiring Rivals as well, for as much as $90 million. Again, Terry reportedly failed to disclose the fraud, which was discovered during the due diligence phase of the negotiations. The deal was killed.

    No word on whether Terry’s history has been disclosed to Yahoo as part of the current negotiations, and how it might affect the deal. My guess is that it could have an impact.
  2. spnited

    spnited Active Member

    Holy D_B ... there's a thread on this two items down.
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