Many of you know all about Sam Sethi, the former TechCrunch writer who left after a disagreement and then went on to create BlogNation. Two days ago Sethi filed a lawsuit against us for libel and other issues. As we always do, we’re posting the litigation threats and will continue to fight the litigation publicly. See our previous posts involving YouTube, Marvel, Rivals, Mediascrape EarthComber and Richard Figueroa.
I don’t need to go into much additional background here. My post from late 2007 gives the complete history of this guy and what he has done. Our response letter, posted below, goes into a lot more detail to back up statements we’ve made.
There are also recent developments not covered in the old posts or these letters below. First, Sethi has been sued by former employee Oliver Starr for unpaid wages, and that case is ongoing. Second, Sethi has admitted that in November 2006 he was barred from being a director or manager of of any company for eight years following the order. He was subject to criminal prosecution and would be personally responsible for debts of a company if he contravened the order. Sethi now says he had the order overturned, which may or may not be true. We’re trying to track down the facts that led to the order – whatever they are, they can’t be pretty.
Needless to say, we think these claims have no merit, otherwise we would not have written the posts in the first place, or would have retracted.
The letter exchange is below. Updates coming soon.
Letter Before Action
Private & Confidential (Not For Publication)
Dear Mr. Arrington,
Our client: Mr. Sam Sethi
Re: Proposed Libel Action v Yourself & TechCrunch
We act for Mr. Sam Sethi in relation to a series of libelous postings in your TechCrunch site containing numerous highly damaging allegations, the most serious of which, are that our client is a criminal, namely that he is a fraudster, and has threatened to kill Mr. Lee Wilkins, a former business associate. Your links to Oliver Starr’s blog “StarTrek” also makes you jointly responsible for the allegations that our client was directly responsible for the onset of Marc Orchant’s heart attack resulting in his death on 9th December 2007.
The above therefore are extremely serious libels.
You have also published other very hurtful allegations against our client and we reserve our right to sue in respect of them unless you make prompt amends to apologise, remove, and offer appropriate damages (all of which will be paid over to a suitable third party such as a charity and/or the Marc Orchant fund and/or other unpaid editors at Blognation), and also pay our client’s legal costs. As you can see our client seeks no personal gain from this claim.
The purpose of this letter is therefore to give you the opportunity of resolving our client’s claim against you without the necessity of court proceedings. However please be under no illusion that our instructions are clearly to issue legal proceedings should you ignore this letter, or fail to co-operate by providing the remedies sought towards full vindication of our client’s reputation.
You have in essence mounted a serious, malicious and sustained campaign of character assassination against our client. This situation can no longer continue. Unless there is prompt resolution we shall issue a claim in libel, within the jurisdiction of the High Court of England and Wales, at the Royal Courts of Justice (in London, UK), limited to the damage (which is immense) that you have caused, to our client!s reputation,
within this jurisdiction.
Your latest missive was on 14th December 2008 in TechCrunch (www.techcrunch.com) entitled: “The Notorious Sam Sethi Launches His Latest Venture, Twitblogs”. In this posting you have said of our client that “some of his former writers have accused him of fraud and other crimes”. This meaning of this is self evident ie that our client is, or at least is suspected, of being a fraudster and guilty of other crimes. This is an indefensible
accusation which is wholly untrue and on our reading, of the background to this case, it has been published by you purely out of ill-will following a “falling out” between you and our client over his refusal to bow to editorial interference by you (leading to our client being forced to leave as UK Editor for TechCrunch UK) over an article (and the subsequent exchange with Loic Le Meur) that he wrote about the Le Web 3 conference in Paris in
December 2006. It appears that you subsequently took great umbrage at our client setting up a competitor site at www.blognation.com, so much so, that you scuppered it last chance of success (ie funding) by posting a confidential (and stolen) termsheet from its VC funders on your TechCrunch site on 7th December 2007 entitled “Blognation May Rise From The Ashes”. We reserve our right to sue for damages resulting from your use of this stolen material which you must have known would seriously jeopardize (and infact did do so) the £250,000 funding that had been secured and would have been paid had you not posted the stolen termsheet.
The first time that you published the allegation that our client had “had threatened to kill” Lee Wilkins (his former business associate) was in your post, again in TechCrunch, on 5th November 2007, entitled: “My Kinda, Blog Network For Eastern Europe, Launches Amid Serious Drama”. You mischievously took a heated “off the cuff” colloquial expression, from a confidential email, and dressed it up to appear as it were a serious and
criminally culpable threat to kill. This was a deliberate distortion and reckless manipulation by you, of any common sense interpretation, of the context in which our client used the words “fucking rip your head off ”. It was also highly hypocritical of your since you have on other occasions, warned and lectured contributing writers, not to exaggerate the significance of, or over-react to a degree of profanity, in the use of heated exchanges in the “instant” medium of blogging and the internet.
Your next “attack” on our client, again on TechCrunch, came on 5th December 2007 in a piece entitled: “Blognation Meltdown: Writers Never Paid, Promises Not Kept”. Here you recited the dispute and grievance aired by Oliver Starr (by copying his post verbatim) which, in summary, was saying that our client was involved in “…usury, fraud even…a good chance that what you!ve [referring our client] done is actually criminal not just pathological and antisocial – perhaps even psychotic behaviour”. Mr Starr, as you will know, at this time was (and still is) embroiled in a bitter civil dispute over non-payment and funding issues relating to Blognation. However, at no time was this a criminal matter, and it was defamatory of you to adopt, as truth, the scurrilous accusations of criminality alleged by Mr Starr. It may be that Mr Starr had his own axe to grind for writing in such a hostile manner following the tragic death of, his friend, Marc Orchant a few days earlier – however that did not provide you, as a “serious player” in this industry, to broadcast and launch, the same attack on your “serious” site. It is our view that you posted the “open letter to Sam Sethi” within TechCrunch to stir up ill-feeling towards our client.
Then, as if to thrust the blade deeper into our client!s reputation you made a further posting on 14th December 2007 entitled: “The Fact And Fiction Of Sam Sethi”. In this post you purported to paint a supposedly accurate scenario of events (a “set the record straight” type of column), but in reality, you continued along the same lines as before ie repeating and adopting the scandalous accusations against our client the most serious of which were that our client was predisposed to making threats of violence and making others feel threatened by him and being thoroughly deceitful. You said:
But Sam made some very dumb decisions in the early days of Blognation…..prompting Sam to lose his cool and threaten to kill him [ie Lee Wilkins]…..It was clear to me that, as despicable as Sam’s actions were, I was too close to the situation to write about it. I also felt vaguely threatened by him…….Sam also threatened a number of the editors he brought on. Many of them came to me with emails and skype messages showing the threats. Sam always just said they were fired employees with an axe to grind. It was clearly bullshit….
When Lee Wilkins, the original founder of Blognation, started a new blog network to compete with Blognation, I felt that it was time to take the gloves off. In my post announcing MyKinda, I finally posted the death threat from earlier in the year….
But then Marc Orchant had a massive heart attack. And the reason he had a heart attack may have been because he was working for Sam…..He [Oliver Starr] decided to destroy Sam and Blognation by attacking him publicly.
Oliver went from writing “I have to say, I like Sam. He’s smart, creative, brimming with integrity” in his first blognation post in August to saying “So… that’s a pretty ugly litany of yours up there; lies, more lies, still more lies, exaggerations, evasiveness, manipulation, usury, fraud even – honestly Sam I think there’s a good chance that what you’ve done is actually criminal not just pathological and antisocial – perhaps even psychotic behavior” just four months later.
Other editors then jumped on board and the floodgates were opened. It was clear that Blognation had never received funding, had never paid anyone for any work, and did not have a workable business model at all. If you care to read it all, see Oliver Starr’s and Debi Jones’ blogs…clear pattern is that Sam would say anything on the phone or skype – apologize, lie, etc. but then not follow up with any promises he made. The mountain of recorded evidence against him is staggering, from bank fraud to recorded conversations. Again, it’s all chronicled on Oliver and Debi’s blogs [links
Sam claims that my posting of that term sheet killed the financing, and blognation. That’s just not true. What is much more likely is that the term sheet was a fake created by Sam, or the fund did due diligence on the financials and realized you can’t start a blog network with no revenue…..
It is hard for people not directly involved with Sam to understand the extent to which he will lie and manipulate to achieve his goals… people just don’t understand outright fabrication and so they often get sucked in to believing that, at worst, someone is just exaggerating a little. I can’t tell you the number of people who came up to me at the Le Web conference this week in Paris to tell me they’d been cheated, duped, or otherwise hurt by Sam. Many of these people attacked me last year when Sam left TechCrunch. Every single one of them apologized to me and said that they now
know the truth about this guy. Some of these people called themselves Sam’s friend a year ago. Now, they just think he’s a jerk.
This is, hopefully, the last time I ever write about Sam Sethi. I’m sure that he’ll take some time off and then start his bullshit again.
Blogging is supposed to be about transparent honesty and conversation. As the community grows it is clear that people like Sam can use and abuse it to achieve their own goals. They can lie repeatedly, get caught, and continue to spin and spin and spin and will at the end have at least a few people who still naively support them.
In his final post, Sam forgets to thank his editors..or express any regret for lying to them during the entire process… I hope he expresses regret for the death of Marc Orchant…And it will help Sam understand just how despicable his actions were.
Without doubt these are very serious accusations attacking our client in his all aspects of his life from personal, to social and to professional. Quite frankly, we have rarely come across a more sustained campaign (at least not in a publication that seeks to command respect) of character assassination as that which appears to have been orchestrated by you from 7th December 2007 onwards (although, as we have said, this appears to have been motivated out of ill-will caused over editorial disagreement between you and our client in December 2006). On any interpretation of the reading of your posts, threads, and links, you have painted our client as a vile, dishonest, and thoroughly disreputable and despicable criminal.
It is clear to us that you do not have a scintilla of evidence that our client is a fraudster of any other kind of criminal, let alone the charge that he would make, even remotely, a serious threat to kill Lee Wilkins or the other Editors (not named) whom you allege he has threatened (by implication) to kill.
The remedies we seek are as follows:
a. That you immediately remove, in all post on TechCrunch (including links and tags) any reference to our client being a fraudster; a criminal! or of having made threats to kill; or being in any responsible for the onset of Marc Orchant!s heart attack and tragic untimely death.
b. That you open a new post, in TechCrunch, headed “Apology to Sam Sethi”, with the precise working to be agreed with us in advance, but setting out a full retraction and apology of the allegations cited above.
c. That you provide a written undertaking not to repeat the same or similar libels again.
d. That you make an offer of damages sufficient to reflect the gravity of the allegations made – all damages to be paid over to a charity and/or an alternative such as the March Orchant!s memorial fund, and/or towards fees of those unpaid editors at Blognation who had remained faithful to the end.
e. That you pay our client!s legal costs which, should this matter proceed to trial, will seriously escalate from what they are now, since we will be in due course representing our client on a “no win no fee” basis.
We urge you to take urgent legal advice, albeit that you are an US Attorney yourself, since, as we are sure you will appreciate, this is a serious claim where early independent and expert advice may save huge expense later on.
May we suggest that it is in your interest to co-operate with us to seek a solution along the remedies outlined above. The alternative, and please have no doubt about this, will be very expensive litigation in London. We are confident of winning such litigation since your
allegations of criminality are blatantly untrue and malicious.
We should also appreciate if you could formally respond as to whether you are voluntarily willing to name the source of the termsheet (with Secora) published by you in December 2007. If not we will have to resort to the courts for disclosure – which obviously will add to the costs of any action. We expressly reserve our right to claim for the consequential damage of the leaked/stolen termsheet but in the event the suitable remedies are agreed relating to the libels on TechCrunch our client may forgo suing on publication of the termsheet.
Can we hear from you within 14 days – in any event please acknowledge receipt via email to
Our First Response:
Re: TechCrunch: Sam Sethi
This firm represents TechCrunch, a U.S. weblog focusing on the technology sector. I am responding to your February 19, 2009 letter addressed to TechCrunch Editor Michael Arrington. As an initial matter, we disagree with all of your characterizations of the various comments listed in your letter that have been made on TechCrunch; rather your letter seeks to suppress open debate.
More importantly, however, TechCrunch is not susceptible to the jurisdiction of English courts, nor is it the obvious forum should your client choose to initiate litigation there. TechCrunch is an indelibly U.S. operation, whose servers are located in the U.S. It has no offices, leases or bank accounts in the United Kingdom. Moreover, it is not aware of any publication to third parties within your jurisdiction of the comments listed in your letter. If the statements of which your client complains were published at all within England and Wales, such publication was de minimus so as not to rise to the level of constituting a substantial tort. If we are mistaken and you know of anyone in England of Wales, other than your client its servants and agents, who read the TechCrunch postings listed in your letter, please let me know. In any event, the natural and appropriate forum for your client’s claims would be the State of California.
In addition to jurisdictional and forum issues, any English libel judgment against TechCrunch would not be recognized or enforced in the United States because we have the principal of freedom of speech guaranteed by the Bill of Rights and state constitutions. As you may be aware, U.S. courts will not recognize foreign libel judgments where “libel standards that are contrary to U.S. libel standards would be repugnant to the public policies of…the United States.” Matusevitch v. Telnikoff, 877 F. Supp. 1, 4 (D.DC.1995).
TechCrunch believes in freedom of speech and it will publish with equal prominence any reply that your client may wish to submit concerning the challenged statements listed in your February 19, 2009 letter. Please let me know if your client would like to submit such a statement.
Of course, if you have any questions or wish to discuss this further, please feel free to give me a call.
Our Second Response:
Re: TechCrunch: Sam Sethi
Dear Mr. _______:
As you know, this firm represents TechCrunch, a U.S. weblog focusing on the technology sector. This letter follows up on our March 18, 2009 letter to you, in which we explained that TechCrunch is not susceptible to the jurisdiction of English courts and the proper forum for your client’s claims would be the State of California.
As also discussed in our March 18 letter, any English libel judgment against TechCrunch would not be recognized or enforced in the United States. American courts will not recognize foreign libel judgments where “libel standards that are contrary to U.S. libel standards would be repugnant to the public policies of… the United States.” Matusevitch v. Telnikoff, 877 F. Supp. 1, 4 (D.DC. 1995). As you may know, the California state senate unanimously passed SB320 last week, which would, as a matter of California statutory law, prohibit the enforcement of an English libel judgment against California residents such as Mr. Arrington and TechCrunch.
As for the statements concerning your client that you claim to be false in your February 19, 2009 letter, TechCrunch stands behind the truth of those statements. You principally complain of various statements in which TechCrunch reports that some of Mr. Sethi’s former writers at Blognation have accused him of dishonesty and fraud. Those statements are true. Former Blognation writers Oliver Starr, Nicole Simon, Debi Jones and Triona Carey have publicly and repeatedly accused your client of lying to them about Blognation’s funding and whether they would ever be paid for the work they
performed for Blognation. In a December 5, 2007 “open letter” to your client (http://owstarr.com/2007/12/05/an-open-letter-to-sam-sethi/), Mr. Starr makes various statements about Mr. Sethi, including:
• “This open letter details in very broad strokes the reasons why I have lost faith in Sam. It makes specific statements as to the veracity of things Sam has said or written as well as things he has failed to do. I do not say these things lightly. Every statement made in this letter can be backed up with verifiable written material from email correspondence, Skype chats, or SMS messages.”
• “At the end, this is a cautionary tale and the victims are the people that have worked for months on the content many of you have enjoyed but for which Sam Sethi has yet to (and may never) pay.”
• “So… that’s a pretty ugly litany of yours up there; lies, more lies, still more lies, exaggerations, evasiveness, manipulation, usury, fraud even – honestly Sam I think there’s a good chance that what you’ve done is actually criminal not just pathological and antisocial – perhaps even psychotic behavior” and
• “Your big return, your blogging network, the content in every post, and nearly everything you’ve said or written about Blognation; it’s all based upon lies… And when that dirty truth leaks out – there won’t be anywhere on earth you can run where the truth won’t find you. (not to mention the lawsuits that are sure to follow close behind).”
In response to Mr. Starr’s open letter, Nicole Simon posted on the same day (see link above):
• “It saddens me to see this posting, but it is the correct, logical next step to take” and
• “The amount of people involved has the advantage of near complete documentation on all accounts, even though we come from different areas of
the world. I expect Sam to pay his bills.”
In December 6, 2007 posts in response to Mr. Sethi’s post on Global Neighborhoods, http://redcouch.typepad.com/weblog/2007/12/sam-sethi-repl.html, Debi Jones writes:
• “Sam just can’t keep himself from lying. It’s out of his control apparently. He contacted me in September and said that he wanted to wait until mid
October when he would have funding in the bank before he brought another editor aboard. About the second week of October when Sam told me that “the money was in the bank.” How does that become you’ll get paid when we get funding?”
Oliver Starr responded to Ms. Jones’ post on Global Neighborhoods (see link above):
• “As Debi points out in the post linked above, there is more than enough evidence to not only prove that what I have said is true but probably to
support criminal fraud charges.”
• “In addition to an email that demonstrates that Sam’s claims are false and that he said on multiple occasions that funds were in the bank, I have Skype transcripts from the Blognation Group Chat where Sam lies, contradicts himself and makes dozens of promises upon which he has yet to deliver.”.
In a December 7, 2007 post on MobileJones.com titled “Sam Sethi and the Blognation Funding Smoking Gun,” http://mobilejones.com/2007/12/07/sam-sethi-andthe-
blognation-funding-smoking-gun, Debi Jones reports that
• “Finally, in his own words from a voice recording made on June 6, 2007, Sam is clearly heard to say, ‘Now, I’ve already raised one mil pounds and
I’m already budgeted for twenty-two full-time editors.’ So, if this is true, then why is no one paid? If this is not true, then why did he say it to the
editors he wished to recruit?”
• “As is documented in the previous post here, I did not join Blognation until October 21, 2007 and was told by Sam on joining that Blognation was
• “If Sam didn’t raise the money, then why did he say that he did? Many people would like to know. What say you now Sam?”
Ms. Jones also states in this post that Mr. Sethi’s claim that “all editors knew coming into [Blognation] that the project was seeking funding and would only be paid once we got that funding,” is a “lie.” “Sam stated Blognation had funding to cover the operation for one year when I agreed to join,” Ms. Jones states.
In a December 11, 2007 post on MobileJones.com titled “Sam Sethi blognation funding web of lies,” http://mobilejones.com/2007/12/11/sam-sethi-blognation-fundingweb-
of-lies/, Debi Jones further reports:
• “Let me state the obvious and point out that today is December 11th and there’s been no word from Sethi on the checks he’s written or electronic
transfers completed to his beleaguered editors.
• Sethi does get one part of his quote to Jemima [Kiss] correct. All of those who joined Blognation have contracts and have the right to sue him.”
On December 5, 2007, The Digital Content Blog of Guardian.co.uk, (http://www.guardian.co.uk/media/pda/2007/dec/05/isblognationfallingapart),
summarized an interview with Mr. Sethi where
“He gave me the name of the investor and said the money is due to come through on December 10th.
‘Anyone raising money knows that it takes time, and it can be a horrible business. It has taken four months to grow this idea to a brand. Every editor has a contract and has the right to sue me, but there are nine editors on the backchannel that are aware of what is happening with the funding.
At the end of the day, the two points are that he said he hasn’t been paid and that I have lied. It is true that the editors haven’t been paid, bar some goodwill payments but I haven’t lied about the funding.’”
In her December 14, 2007 post in he blog in “Observations from the Fireside”, titled “Sethi fraud was all Mike Arrington’s fault,”
http://rulabula.blogspot.com/2007/12/sethi-fraud-was-all-mike-arringtons.html, Triona Carey writes:
• “After a frenzied week of speculation around the blogosphere, Sam Sethi has finally thrown in the towel, and posted his resignation as CEO of
• “So, it seems not everybody was taken in by slimy Sam’s charm and posh shoes. For everybody’s sake I hope the last paragraph doesn’t come true -
serial entrepreneur my ass, more like serial cheat.”
These statements were made by and about Mr. Sethi more than 17 months ago, and covered in great detail in the blogosphere (both in the US and the UK), yet Sam Sethi never produced any additional investors or funding after he made these statements. Nor is TechCrunch aware that he ever paid these four former writers at Blognation. Simply put, there is not only an ample amount of factual support that some of Mr. Sethi’s former
writers have accused him of dishonesty and fraud, but also for the basis of those allegations.
As for your complaint in your February 19 letter about the statement in the November 5, 2007 blog titled “MyKinda Blog Network for Eastern Europe Launches Amid Serious Drama” that Mr. Sethi “had threatened to kill” his former business associate Lee Wilkins, you claim that Mr. Arrington “mischievously took a heated ‘off the cuff’ colloquial expression, from a confidential email, and dressed it up to appear as it
were a serious and criminally culpable threat to kill.” Nothing could be further from the truth. Mr. Arrington’s blog, http://www.techcrunch.com/2007/11/05/mykinda-blognetwork-
for-eastern-europe-launches-amid-serious-drama, fully set out the text of Sam Sethi’s email so that readers could see the context in which the characterization was made:
“Will you fucking leave Danny and Saul out of this what have they got to do with this or I will come on the next flight and fucking rip your head off. If you have a grief it is with me and tristan. They are very busy people you idiot. Add that to your lawyers list and send over the docs asap pls.
Thanks in advance.”
Obviously, no reasonable reader of your client’s email or the November 5, 2007 blog as a whole could conclude that your client had actually made a “criminally culpable threat to kill” Mr. Wilkins.
There is no dispute that Mr. Sethi has harsh critics among former business associates. TechCrunch accurately reported the rise and fall of Blognation and fully disclosed its history with Mr. Sethi to its readers. In fact, the December 14, 2007 CrunchNote, “The Fact and Fiction of Sam Sethi,” http://www.crunchnotes.com/2007/
12/14/the-fact-and-fiction-of-sam-sethi/, is a fair and accurate summary of Mr. Sethi’s background with TechCrunch and the disputes surrounding him and Blognation.
Should your client file a complaint for defamation concerning the matters set forth in your letter and a trial were to ever occur, the trier of fact would weigh Mr. Sethi’s credibility against that of Mr. Starr, Mses. Carey, Jones and Simon and any other former employees and business associates involved in Blognation. If Mr. Sethi has information that rebuts that claims of these four people, we again invite him, as we did in our March 18 letter to you, to provide TechCrunch with any reply that your client may wish to submit concerning the challenged statements listed in your February 19, 2009 letter. As we told you previously, TechCrunch will publish Mr. Sethi’s reply with equal prominence to its previous posts about him. You have since told me over the telephone that your client is not interested in submitting such a reply. Should your client change his mind and wish to submit such a statement, please let me know. Of course, if you have any questions or wish to discuss this further, please feel free to give me a call.