Yet another reason to keep a tight set of reins on your Web based properties! Apparently a Yahoo was sued over not being more proactive with their Web groups. The suit actually is based on a child porn ring discovered on the Yahoo service.

A minor and his parents have filed a $10 million lawsuit against Yahoo Inc. (YHOO.O: Quote, Profile, Research) and a man who once operated a Yahoo Groups site where members traded child pornography.

The lawsuit, filed on May 9 in U.S. District Court for the Eastern District of Texas, charged that Yahoo breached its duties by allowing co-defendant Mark Bates and others to share child pornography on a site, called Candyman, that Bates created and moderated via the Yahoo Groups service.

Yahoo spokeswomen Mary Osako said the company had not been served and did not comment on pending litigation.

Bates pleaded guilty in 2002 to setting up the Candyman group site for the trade and distribution of child pornography, the Houston Chronicle reported at the time. The site attracted thousands of users and was in operation for two months before Yahoo closed it down in February 2001. [Read the rest]