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  1. Media Law
July 4, 2024

Bankers allowed to sue Dow Jones under GDPR over ‘missing $1bn’ article

Publisher argued data protection complaint was brought to avoid rules applying to defamation claims.

By Charlotte Tobitt

The publisher of the Wall Street Journal has failed in its bid to dismiss a data protection lawsuit it claimed was being “brought under a false flag to avoid the rules that apply to defamation claims”.

A High Court judge in London dismissed an application by Dow Jones to strike out the claim under GDPR and the Data Protection Act as an abuse of process and said there should be a preliminary trial centring on the personal data involved.

Investment bankers Joseph Pacini and Carsten Geyer, both formerly senior executives of the XIO group of companies and now co-managing partners of SGT Capital, are suing Dow Jones over a March 2017 article headlined: “Did Xie Zhikun’s nearly $1 billion go missing? A private-equity mystery.”

The bankers also took issue with a January 2018 article headlined: “How J.D. Power was acquired by a Chinese company shrouded in mystery” which further reported on a dispute over its funding. They say both articles published what they claim is inaccurate personal data about them.

According to a judgment published on Wednesday, Dow Jones argued the claim was “purely tactical and an abuse of process” in part “because it is in reality a statute-barred defamation complaint dressed up as a claim in data protection, and brought in data protection to avoid the rules which apply to defamation claims”.

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Several letters were sent by Harbottle & Lewis, solicitors for XIO UK and later for XIO Group, ahead of the publication of each article warning Dow Jones that making the allegations would be “seriously defamatory”. The judgment summarises: “Proceedings in defamation were threatened in the strongest terms.”

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In a 2023 letter the law firm Withers, which now represents Pacini and Geyer, said both articles carried the meaning that they “were guilty of and/or conspired in and/or were involved in fraud, dishonesty or deceit by stealing and/or misappropriating funds, and that they did not disclose the true investors in JD Power to the US authorities and/or were deliberately secretive and/or misleading as to their identities”.

In his witness statement, Pacini said he brought the claim when he did because all allegations of wrongdoing against him had been withdrawn and Zhikhun had died, meaning the articles were “outdated, but continued to be influential and available online”.

He said the articles were “now causing him and Mr Geyer serious difficulties in raising funds from institutional investors”, according to the judgment, as they were “always the first conversation that he was forced to have with potential investors.

“For instance, despite his having worked in the past for JPMorgan and BlackRock, which had been among his biggest investors at XIO Group, both refused to let him affiliate with them, or to invest in SGT, because of their concern about the articles.

“Similarly, other investors had declined to come in with SGT because they had said that they could not be associated with him, and SGT had in addition come under increased scrutiny from Government bodies. It was towards the end of the pandemic in 2021, when he and Mr Geyer started trying to raise funds again, that the articles were being repeatedly brought up and were affecting their business, and Mr Pacini realised that he had to take action to bring this damaging situation to an end.”

Similarly Geyer said he “fears that the articles have effectively destroyed his ability to work in the industry other than for himself. That being so, he wants such inaccurate processing of his personal data to stop”.

Dow Jones argues data protection action designed to ‘get around’ defamation difficulties

Dow Jones argued that the “nub” of the complaint was “the protection of reputation”. Hugh Tomlinson KC, representing the bankers and citing their “right to be forgotten”, accepted there is a reputational element to the claim but said it is not the “nub”.

Catrin Evans, representing the publisher, argued that “the use of a cause of action in data protection is purely a tactical – and impermissible – device to get round the difficulties which a claim in defamation would face”.

“Those difficulties would certainly be substantial,” the judge noted. Evans cited the one-year limitation period in defamation, the need to show serious harm, “libel tourism” restrictions, and the availability of several potential defences including qualified privilege.

“The inference is invited that a claim in data protection has been ‘retrofitted’ to avoid those obstacles, when in truth the essential complaint, the ‘nub’ of the complaint, remains one of damage to reputation,” the judge summarised.

He also noted it is “plainly arguable that the published information is seriously defamatory”.

On the other hand, Judge Parkes continued, by choosing to claim under data protection law Pacini and Geyer bear the burden of proving that the published information is inaccurate.

The judge said he had “great sympathy” with the point made by Evans that “the pre-action correspondence over many years, with its repeated empty threats of proceedings in defamation made by solicitors on behalf of XIO Group and the claimants, is strongly suggestive of a long-standing concern on the claimants’ part with damage to their reputations” but he added that he “cannot ignore the claimants’ evidence”.

He said the bankers have “clearly stated” their objective with the case and that this “cannot, it seems to me, be dismissed by the court on a summary application such as this, even in circumstances in which the claimants have been so sparing in their explanations for many years of inaction”.

Wall Street Journal lawsuit should be heard, judge rules

Explaining why the claim took years to bring, Tomlinson “maintains that the articles deal with historic matters where the true facts are now clear and at variance with what was originally reported. In the seven years since the original publication of the first article, and the six years since that of the second, the public interest considerations relating to the processing of the claimants’ personal data have changed very substantially, and despite the claimants’ requests, Dow Jones has done nothing to amend, de-index or remove the articles, or to make the true position clear”.

Judge Parkes added that he “cannot see how they can be summarily denied access to the court” to make their case “simply because in the past they have repeatedly threatened to claim in defamation, or because the claim is heavily based (as it is) on considerations of harm to reputation, or because, had they brought the claim in defamation, it would have faced very difficult obstacles”.

The judge added that the claim “seems to me to be arguable, and not plainly improper. Moreover, Dow Jones’ argument for abuse seems to me to be fact sensitive and to require a full trial.”

Dow Jones had also claimed there was a “very low” level of publication within the UK.

However the first article received 4,617 views in the UK, of which 63 were in 2022 and 41 in 2023. The second article was viewed 2,612 times, of which 44 were in 2022 and 34 in 2023, according to David Barker, a partner in Pinsent Masons representing Dow Jones.

Judge Parkes said this was not a “de minimis” level of publication, adding: “It would not take many page views by people in the investment management world for the problems to arise” that the claimants said were affecting their ability to raise funds.

A trial of a preliminary issue will now be held covering the meaning of any personal data of which Pacini and Geyer are the data subjects, whether that meaning was defamatory, and whether it was criminal offence data within the meaning of Article 10 GDPR which restricts such processing.

Email pged@pressgazette.co.uk to point out mistakes, provide story tips or send in a letter for publication on our "Letters Page" blog

Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
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