Jim Cramer, Lenny Dykstra Debacle Leads to Libel Suit
Now the company that Lane accuses of supplying Dykstra with over $250,000 to promote its shares on TheStreet.com and provide access to the site's founder and "Mad Money" host Jim Cramer says those allegations are all wrong -- and it has filed a $100 million libel and defamation suit in California State Court.
At issue is whether the vending solutions provider AVT (AVTC), formerly known as Automated Vending Technologies, paid Dykstra that six-figure sum as part of a "plug-for-pay" scheme, which Lane detailed in an article in The Daily Beast excerpted from his new book The Zeroes: My Misadventures in the Decade Wall Street Went Insane. "We are simply not going to allow anyone to publicly defame AVT in this matter without taking action against them," said AVT company founder Shannon Illingworth in a statement. Illingworth told the New York Post earlier this week that Lane's comments were "totally taken out of context. It's totally wrong." (Lane did not respond to a request for comment.)
Relationships Quickly Sour
The stock-picking story Lane describes stems from comments made to him by Richard O'Connor, who introduced Dykstra to Illingworth in 2008 leading to the deal reportedly cut between the two men. But Hedgetracker.com points out that O'Connor may have a serious ax to grind against AVT: the company had fired him "for not delivering on his fundraising and marketing commitments" and then sued him -- also for libel and false claims -- in California State Court. That judgment went in AVT's favor, with the court ruling O'Connor was liable for nearly $38,000. (He has yet to pay, according to Illingworth.)
And of course, there's the fact that Dykstra himself owes a significant amount of money to Lane, hired by the former ballplayer to produce The Players Club, a financial advice magazine for professional athletes. The arrangement quickly soured, Lane sued Dykstra, and was supposed to receive $200,000 -- a payment Dykstra defaulted on when he declared bankruptcy in 2009.