Last week I published The Ballad of Geoff the Troll, a funny-but-not-funny look at a troll who rampaged through a ChromaDex investor discussion board for a month.
We don't know who Geoff is or why he came, but I had a suspicion that Geoff not only worked for Elysium, but might even be affiliated with Elysium's primary law firm, Skadden Arps.
I included in the blog post the evidence that I thought made that suspicion reasonable: The timing of Geoff's appearance, His manner of speaking, The things he talked about, His claimed areas of interest, The things he responded to, His peculiar interest in my posts, His cheerleading for Elysium's scientific advisory board, together suggested a lawyer working on Elysium's behalf, and there are only so many of those.
Of course, if that were true, it would beg the question of WHY Skadden -- or for that matter Elysium -- would bother to troll the investor message board. Monitor, sure, but troll? And I truly do not know, although below I will venture a guess.
New Evidence
However, since I wrote the original post, two additional pieces of evidence have come to light that make my suspicion as to Geoff-the-Troll's source just slightly more reasonable.
Silence Is Golden
First, after I released The Ballad of Geoff the Troll, Geoff-the-Troll went completely silent, which is out of character for him.
If I were wrong that Geoff was a troll, there is plenty that he might say. He could prove that he really IS a shareholder, and tell us when he bought his shares, and how many, and explain why he continues to hold the shares despite his obvious esteem for Elysium and his expressed doubts about the quality of ChromaDex's intellectual property. Geoff is very accustomed to defending himself against accusations of being a troll, so it is strange for him to let up so suddenly.
Moreover, if Geoff were in fact a troll but not associated with Elysium or Elysium's law firm, there are all kinds of ways and reasons for Geoff to talk about that. Geoff would delight in showing how wrong I was. I would have expected him to rage and denounce, and to marshal all his counter-evidence -- a great opportunity to prove his usual point that I don't know what I am talking about.
But instead, we got a silence that feels, to me at least, more like grudging assent. Or maybe it feels like someone behind the scenes is doing damage-control and has told Geoff to shut up and not make things worse.
I can't say for sure, but it feels more like I hit a nerve than like I missed the mark.
A New Threat
The second new piece of evidence comes from Monday's opposition brief that ChromaDex filed in the Central District of California, which includes a peculiar comment.
I covered ChromaDex's opposition brief here, but I did not highlight this quote from the brief:
"...Elysium has been aware of the underlying grounds for these allegations since at least November 3, 2017—the date when Elysium’s counsel levied extrajudicial threats against ChromaDex based on the same alleged facts...Counsel for Elysium impliedly threatened that the unsupported allegations, if made public, would lead to potential class action lawsuits and even a potential California Attorney General action damaging ChromaDex’s business..." (emphasis added)
This opposition brief was not available when I wrote The Ballad of Geoff the Troll, but compare Cooley's comment in the brief, that Counsel for Elysium threatened that revealing the alleged contamination of Niagen would lead to potential class action lawsuits, with the similar comment below that Geoff made on the Yahoo ChromaDex discussion board about two weeks ago.
Two weeks ago was after "the unsupported allegations" were in fact "made public" in Elysium's Proposed Third Amended Counterclaims, but before Cooley's account of Elysium's lawyers' alleged threat was made public in ChromaDex's Opposition brief.
Geoff asks, Couldn't Elysium's new allegations lead to a "massive lawsuit" from ChromaDex customers?
That's the same thought Elysium's counsel allegedly had -- a massive lawsuit -- and I do not recall any other commenter on any ChromaDex investment board who expressed anything similar.
Leaving aside Geoff's lawyer-like interest in the technical details of the no-damages scenario in products liability or UCC law, how weird is it that Geoff seeded the public message board with the same threat that "Counsel for Elysium" is said to have delivered to ChromaDex months earlier?
If Geoff isn't counsel for Elysium, he least thinks the same way about legal strategy.
It's one more piece of evidence.
So What?
In the big picture, I don't think it matters very much whether the investor message boards get trolled by deceivers attempting to sow unease among ChromaDex shareholders. In the long run, ChromaDex's IP is probably sound, NR probably takes off, and ChromaDex appears to have the financial resources to fend off these attacks. And as far as I can tell, ChromaDex retains an ace in the hole, which would be a patent infringement lawsuit targeting sales of Mystery NR pursuant to the patent claims that the PTAB has already upheld.
However, that doesn't mean that the trolling activity is benign and has no consequences, or that it is not improper.
As for consequences, the time and trouble of the investors sorting through the chaff on the board is a nuisance. To the extent that the disorder and negative emotions stirred up by trolls actually dissuade investors from participating in the community at all, or effectively buries important discussions, that is a much bigger problem.
And if the doubt sown ends up dissuading people from investing in the stock, or from increasing their holdings, that sounds like a MUCH, MUCH bigger problem.
And in truth it is hard to imagine any OTHER motive for a sustained effort like Geoff's, which involves 150+ posts and a great deal of reading, than something with some significant financial impact. It is hard to imagine that Geoff was motivated merely by boredom or by a personal animus toward the individual investors, most of whom were anonymous.
That's why I suggested in the original piece that Geoff must be long, short, or billing his time.
But Why?
It remains a legitimate question why Geoff or anyone else would think that there would be a reasonable return on the time or money invested in disrupting the Yahoo investors' discussion. There are only maybe a few dozen participants on the discussion board, and the total population (including lurkers) would probably be in the hundreds or less, not the thousands.
One Theory
My theory is this:
Elysium is spending a fortune on litigation. ChromaDex reported something in excess of half-a-million dollars a MONTH in legal fees last quarter, and my understanding is that Skadden charges up the wazoo. So if Elysium's legal fees are anything like that, they need some substantial benefit.
But if I am correct in my analysis elsewhere that Elysium's legal position is actually very weak (e.g., PTAB has already upheld one of the challenged patents entirely and the other partially; I am expecting Elysium's SDNY complaint to be dismissed on First Amendment grounds; and in California the text of the underlying Trademark and Royalty Agreement does not seem to support the Patent Misuse claim, which is why Cooley characterized the Patent Misuse claim as "fictional"), then how does Elysium win big enough to justify the litigation cost?
What if the goal of the litigation were not to win, but only to sow doubt among the investment community for a time, which could potentially harm ChromaDex in a variety of ways? For example, institutional investors might steer clear entirely or commit less if they think that ChromaDex faces significant legal risk. A depressed share price maybe creates the possibility of a takeover, and maybe increases ChromaDex's costs, like the cost of share-based compensation. The litigation certainly risks distracting management and drains resources that could be otherwise invested in product development and marketing. And maybe Elysium just needs to buy time to re-orient its business in some respect.
But for the litigation ploy to work, the litigation has to seem real and potentially scary. And if you believe me, Elysium's legal claims are not scary. In fact, they are tenuous, and likely to fail, later if not sooner -- which is one reason to believe that the goal is not to recover damages in excess of legal costs.
So one element of getting this very-expensive litigation strategy to work MIGHT be to discredit that stupid legal blogger who keeps liberating the trial documents from PACER and inviting everyone to read for themselves, and then highlighting, summarizing, analyzing, and dissecting the various arguments.
So if (1) Elysium is spending millions of dollars per year on litigation (which is almost certainly true); and (2) if the value of that investment in litigation is to sow fear, uncertainty, and doubt that is difficult to dissipate without some legal expertise; and if (3) the local and national press (including the Boston Globe) has decided for some reason not to cover the litigation at all, then the last order of business would be to silence or discredit the pesky legal blogger.
If that were the strategy, then "Geoff" could understandably be deployed to characterize me as "dead wrong" and incompetent.
Conclusion
Based on this evidence, I would conclude that Geoff the Troll is in fact Skadden acting on behalf of Elysium -- especially taking into account Geoff's sudden disappearance and the similarity between alleged threats by Elysium's counsel revealed this week and Geoff's concerns seeded on the message board two weeks ago.
I think it is LESS likely that Geoff is instead some short seller who inexplicably thinks that raising litigation concerns and praising Elysium's Scientific Advisory Board in a relatively small discussion group is going to move the stock in the short term.
But we don't need to know who is advocating on Elysium's behalf or why to recognize a pattern of behavior.
The "nefariously conceived plan" that Cooley described that involved "disseminating untrue information to investors" appears to be active still.
I don't know the legal definition of "nefarious," but anonymously impersonating your opponent's constituents and doing things like disrupting their activities, getting their comments deleted, being deceitful about one's identity, and defaming others, all seem nefarious to me, and I believe they are all things that occurred.
Maybe it's a brilliantly conceived plan, or maybe it's just some Silicon Valley wannabe's who imagine themselves as disciples of Sun Tzu and think that this is how you sow discord among the enemy.
But if ChromaDex is trying to prove in New York that such a plan to mislead ChromaDex shareholders ever existed, the evidence that such a plan appears to be active even now, could prove relevant.
I would like for all large law firms to be beyond reproach when it comes to ethics. I would like for all large law firms to view the line that separates zealous advocacy and professional misbehavior as a scary kind of precipice that they don't want to go near to, rather than as some kind of dare line to careen past as long as one slim fingernail remains in the black. I would like for Skadden to be the LAST place you would ever expect a Robert Mueller indictment to take down an associate for misbehavior, instead of the first place where it actually happened. If I believed that those things were true, then I would not have these suspicions.
And most of all I would like for the ABA Code of Professional Responsibility prohibition against "dishonesty, fraud, or deception" (Rule 8.4(c)) to apply to anonymous attacks on an internet message board relating to an active representation. But I don't hold out much hope. I haven't found much legal discussion on point. And (for example) Rule 8.4(g) seems to prohibit harassment only when based on race, sex, age, disability, etc. Garden variety harassment is apparently within the lawyer's job description, and maybe other things, too.
Epilogue
Meanwhile, two days after Geoff went silent, a NEW troll emerged: obs. Obs is not concerned about the litigation, but is instead pitching the idea that NR doesn't work, and that ChromaDex insiders are busy jumping ship.
Who sent Obs? Obs says, "I know a lot more than I can say." That sounds more like somebody's agent than like a shareholder.
I'll see if I can compose another parody song to work an exorcism.