Silvercorp files lawsuit against short sellers

Fri Sep 23, 2011 10:39am EDT
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(Reuters) - China-focused miner Silvercorp Metals SVM.TO said on Friday it had filed a lawsuit asking websites to remove "false, defamatory and fraudulent information" from short-sellers who have accused the company of fraud.

Toronto-listed Silvercorp filed its suit in New York County Supreme Court. It charged, Jerry Katz,, Alfred Little, Simon Moore and several "John Doe" defendants with spreading false information about the company on the Internet and in letters.

Silvercorp said the defendants had attempted to drive down its stock price to make their short positions in the company's stock more profitable.

In its lawsuit, Silvercorp demanded that the short sellers remove the statements and reports against it that are posted on and and it asked the court to block the short sellers from publishing "further false and defamatory reports concerning Silvercorp."

Simon Moore, who edits material posted on, was not immediately available for comment.

Silvercorp said it is seeking monetary damages of an amount to be determined at trial and punitive damages in excess of $10 million.

Silvercorp is one of numerous North American-listed China-focused companies to come under short-seller attack. The short sellers have accused it of inflating earnings and the size of its mineral resources.

The company, which operates silver mines in China, has denied all the allegations against it, describing them as part of a "short and distort" scheme.

Shares of Silvercorp rose 1.4 percent to C$7.15 in morning trading on the Toronto Stock Exchange, while its U.S.-listed shares were up 1.6 percent at $6.93.

(Reporting by Euan Rocha)