CCBN Sues Thomson Over Unfair Trade and Business Practices

Corporate Communications Broadcast Network (CCBN), a company that enables direct communication between public companies and the investment world, filed a lawsuit against Thomson Corporation and its subsidiary Thomson Financial Inc., alleging that it had breached its fiduciary duty by using classified information from CCBN board meetings to compete against the company. The lawsuit, which was filed in the U.S. District Court for the District of Massachusetts, said that Thomson has engaged in unfair trade and business practices, misrepresentation, breach of contract and monopolization in violation of the Sherman Antitrust Act. Thomson owns 10 percent of CCBN and has two seats on its board of directors. A Thomson spokeswoman would not make any executives available for comment and would not comment specifically on any of the allegations brought by CCBN.

According to Jeffrey Parker, chairman and ceo of CCBN, beginning in 2000, Thomson Financial began to use its position on the board of directors to learn of CCBN's offers and decisions to create and expand its own investor relations communication services, and later to provide services with PR newswire that CCBN already offered including Web site hosting and Webcasting. Both are areas, in which Thomson was not previously involved, CCBN claims. Parker said, "Thomson unveiled a strategy they had secretly been developing over the course of the prior couple of years to enter and compete directly with CCBN's business and effectively to copy everything we've done. Thomson entered our marketplace which was clearly in violation of their loyalty as a director and effectively stole our products."

CCBN says it thinks that Thomson has been secretly using information it acquired through board of director meetings for some time. The company became most suspect to Thomson's motives when it formed an alliance with PR Newswire, a company that provides many of the same services that CCBN provides such as IR Web hosting services, Web casting and contact management. Before the alliance with Thomson, PR newswire also had control of two businesses that compete with CCBN. When the alliance was formed, Thomson took control of CCBN's rival businesses. Parker said CCBN was surprised by Thomson's desire to control companies that directly competed with another company they were involved with. "They have over $5 million invested in CCBN you think they would want to embrace CCBN."

Parker said that he does not believe in filing lawsuits frivolously and he has made many efforts to talk to Thomson executives before he considered using the legal system. He said when he met with Richard Harrington, CEO of The Thomson Corporation, he offered him four options including exiting the markets CCBN was involved in and to purchase CCBN. "I thought it was appropriate to give Thomson every single opportunity to work this out amiably and my feeling now is that I was dismissed out of hand like a fly on the elephants back." Parker hopes that his lawsuit will convince Thomson to leave the markets but he also wants "to hold Thomson accountable in a courtroom for their actions."

Parker hopes that this case will become a landmark case on the issue of loyalty and business ethics. "If someone can sit on someone's board and be an insider then every CEO in American will reevaluate whether he's looking into eyes of competitors at this next quarterly directors meeting."

CCBN enables direct communications between public companies and investment community over the Internet. It also offers Web-based investor relations products and services, provides shareholder information through interactive solutions and hosts live and archived quarterly conference calls. Thomson Financial provides integrated information solutions to businesses. Thomson provides value-added information, software tools and applications to more millions of users in the various fields.