SEC Investigating SCO? 281
Udo Schmitz writes "As Groklaw reports, the SCO Group stated in a SEC filing from yesterday: 'In addition, regulators or others in the Linux market and some foreign regulators have initiated or in the future may initiate legal actions against us, all of which may negatively impact our operations and future operating performance.' Does this mean the SEC finally started to pull some stops? SCOs and Canopys financial dealings (Vultus acquisition anyone?) long ago lead to speculations in the Linux community about the legality of their business practices, or the whole lawsuit just being a stock scam."
Good chance of it being a scam (Score:4, Interesting)
The corporation's responsibility is working in the best interest of their shareholders - everything short of breaking the law in order to turn a profit for those who own stock. If that means suing a company just to stay relevant, so be it.
That's how public corporations work. It may not be morally correct (for some definition of morality), but they are responsible for protecting their shareholders... In the end [yahoo.com], the trick may work the way they wanted - extending the life of a failing company for another few years so that shareholders have time to sell and salaried employees can collect a few more dollars.
And their stock is UP on the news (Score:1, Interesting)
They got in over their heads (Score:5, Interesting)
It was reasonable to assume that if they sued IBM over its use of UNIX, that IBM would also cave in and give them a bundle of cash. Given what the lawyers have cost so far, it would have been cheaper. Oops, IBM didn't cave.
There are very serious issues involved in the SCO vs. IBM case which could have made many businesses worry about adopting Linux. IBM had bet the farm on Linux. IBM had no choice to fight.
Not only did SCO not have a leg to stand on but it seriously looked like they were perpetrating a fraud. Their only chance to stay out of jail is to make it look like they really believed their claims about IBM. SCO, therefore, had no choice but to fight to the bitter end.
What have we gotten out of this whole mess? Linux is unencumbered by anybody's copyrights. All doubt has been removed. The extra publicity may actually have promoted the uptake of Linux. We have gotten a wonderful legal education on Groklaw. We have been activated. A lot of people realize the importance of the next big fight (patents) and have started writing their congresscritters.
So, thank you SCO. Good luck staying out of jail.
This doesn't mean anything (Score:4, Interesting)
If there is some risk that a company doesn't disclose, where there was some way for them to know that it was a posibility, they can be sued by shareholders if the stock goes down as a result of it comes true.
You often find really silly risks listed in safe harbor statement like that. For example, Walmart lists as a risk that they may not be able to buy from certain vendors if political instability takes place in their country. They also disclose that they won't do as well if they can't hire good employees.
Also, if they know about a SEC investigation or lawsuit against them, a company would usually give more information than that in a 10k (lest the SEC investigate them for the way they disclose their risks in their 10k).
Re:This doesn't mean anything (Score:5, Interesting)
FYI, the full text of the risk that Groklaw is quoting from:
The Wheels of Justice Turn Slow (Score:5, Interesting)
Anyway, I don't foresee a serious SEC investigation until the lawsuit is settled. It would be a waste of resources to start an investigation when all that really needs to be done is to sift through the broken remants of a case. If a judge dismisses the case because SCO never had any more evidence than "It looks like UNIX so they must have copied it!" then I expect the SEC would crawl up SCO's ass with a microsope at that point.
You almost made it... (Score:1, Interesting)
How many clue-by-four are required to make some people understand that the only bloody thing that makes projects like Linux possible IS copyright and someone having the copyright for some stuff?
If noone had any copyright to any of the Linux code, it would be public domain. Don't fool yourself, and PLEASE STOP spreading such crap as if it was a fact. Be humble, or get an education.
Re:About time (Score:5, Interesting)
The SEC will become involved at whatever time IBM thinks it is most efficient for them to become involved, and the first thing they will get to help them is copious evidence gathered by IBM's private investigators. Apparently, IBM has decided they have enough.
Without the trivial exaggeration of the first paragraph, and in all seriousness. This will end only after a dozen "mysterious suicides" and "accidents". Yes, real deaths. Some of the people who banked on SCO's claims got their start busting real people's real kneecaps over trivial 1,000 dollar loans. They are looking at financial losses, criminal prosecution, and in some cases this will be RICO based. Every single thing you have read here on Slashdot will look trivial as this ends up hitting the national press - Just be sure to read down, as by then the mentions of Darl, Canopy or SCO may be buried in the fourth paragraph or so.
Unless something has changed, I doubt it (Score:5, Interesting)
Since I didn't know what, if anything, was happening, I reported them to the SEC. I was shocked to get a call the NEXT DAY from a man who identifdied himself as an attorney with the SEC. We spoke for about 45 minutes. At the conclusion of the conversation, he indicated that he thought he understood my issues with them - their apparent lies, their seeming stock manipulation, etc but doubted that he could proceed without more specific information about how they knowingly lied to the public.
If sufficient evidence was produced, he seemed interested in protecting the public from abusive corporate officers. He was not satisfied with what I offered him.
Unless someone has subsequently provided more and better evidence than what I knew about as an interested observer, it is doubtful that the SEC proceeded.
I was displeased that I was unable to move them to action.
Regards,
Anomaly
More interesting information than that (Score:3, Interesting)
Yep. And the only difference between a normal Yahoo board and the SCOX board in that respect is it is the pumpers who primarily spew the garbage and deliberate misinformation moreso than the dumpers. The board is mostly filled with noise.
And the site in your post merely notes a few hits from Caldera sites - that could very easily be a worker checking the message boards for clues about what's going on with SCO, not neccessarily any monitoring by SCO management.
As the person responsible for the site in question, I think there is a bit more there than that. In fact, the Caldera information is the least interesting page there and something I actually regret having posted.
Of more interest is the examination of a fund manager who had invested in SCO and how he reacted when the SCOForum 2003 code that SCO showed was shown to be utter bunk in under 24 hours. The story of how that fund manager acted and what happened to the shareprice is much more interesting than caldera.com webhits.
Or, there is my guess (informed by Yahoo SCOX discussion) on the early timeline--back in the summer and fall of 2002 before SCO went public with anything. I happen to think that Morgan Keegan was likely the entity that brought in both MS and Boies.
More recently, there is an interesting reverse merger related to a currently private Redmond, Washington based company that SCOX has at least a 10% ownership of. I suspect it is a backdoor attempt to get some money into SCO's coffers so they can continue a bit longer.
It is speculation and could very well be wrong--but it is also information I haven't seen anywhere else and is definitely not "spam, garbage, [or] deliberate misinformation."
Don't underestimate the power of the geek (Score:2, Interesting)
Wonder geek powers, activate! Form of: an 800lb. gorrilla! Form of: a tidal wave of litigation!
Actually, if anyone remembers, it was the tidal wave of slashdot-expanded open source coders that got the SEC to force the Red Hat stock to be pulled out of the pockets of stock manipulators and reissued to the open source Friends and Family group of IPO stock.
So, don't underestimate the power of the good side of the geek
Trust the Geek, Luke.
Re:Good chance of it being a scam (Score:3, Interesting)
Dunno what you mean "they won't get hurt on the same level as a regular shareholder". If they buy stock and it goes down in price (because the CEO is pumping and dumping or for any other reason) and they sell it for a lower value, then they lose the same money as any other shareholder.
In other words, YES, they are only share holders in the context of holding shares. So they are shareholders. Jesus Christ.
Re:My favorite quote from the article: (Score:3, Interesting)
Unless you got it when it was at the $28.00 / share range, you'd have had a hard time finding a company willing to short it to you.
I shorted it when it was at $5.13 on my stock simulation (simulator.investopedia.com) and made $3,630 virtual dollars on 3000 shares at current market value of $3.92. But, from what I understand, you wouldn't have been able to find anyone willing to short 3000 shares of SCOX in the past 2-3 years or so.
~Wx
Re:stock scams (Score:3, Interesting)
more true than most people know.
Like the massive manpower ramp-up (and concurrent book-cooking) in the late 1990's that companies did just to show stockholders that they were "growing".
The current "fad" is offshoring and outsourcing, to show stockholders that they're "cutting fat".
Fooling the investors in order to get cheap financing can temporarily make a money-losing enterprise look profitable.
None of this has/d a damn thing to do with running an actual functional business.
Because the SEC does nothing to stop this, it's common practice, and companies who don't do this are at a steep competitive disadvantage.
Is corporate Anarchy good for the American Economy, long-term?
Does that spell good things for our future ability to finance our military defense?
Corporate America is slitting it's own throat.
Re:I hear quite abit about SCO (Score:1, Interesting)
> They were a joint venture with Microsoft
SCO were originally two brothers who contracted to MS to help write Xenix. Later they formed a company to appear to be more than 'a couple of guys'.
> to write a port of Unix System V to the 8086 and 8088.
It was Unix edition 7, well before System III let alone SV.
> Microsoft was supposed to pay SCO licensing for > Xenix,
No. Wrong. It was MS Xenix until MS sold it to SCO and then SCO had to pay licencing to MS for years, even though all the MS code had been rewritten, until they went to court which said that they no longer had to pay.
> but since they never used it,
Actually MS sold Xenix and advertised it and even used it internally for development until the late 80s.
> they figured they didn't have to pay SCO.
Quite wrong. SCO was paying MS after they bought it.
> SCO demanded rights to Xenix back, and got it.
Quite wrong. Xenix belonged to MS until SCO bought it from them. Even then MS had a large part of SCO stock and Paul Allan was CEO for some time.
> a company whose history I know less of,
I didn't think that was possible, but then I read it and decided this was probably the only true thing in your post.
> the Unix name -- they sold it off to Caldera.
Novell gave 'the Unix name' to the Open-Group. The sold the Unixware business and Unix licencing business (but not 'Unix') to SCO who then sold it to Caldera (which is not part of Novell) and then SCO also sold OpenServer (Xenix renamed and merged with SVR4) to Caldera and also the SCO name.