Brad Stone (Wired): The Linux Killer. If SCO loses, the company is likely toast. But winning will be a tall order. SCO must show that the old, murky contracts between AT&T (which developed Unix), Novell (which bought the operating system from AT&T in 1993), and the old Santa Cruz Operation deliberately transferred the Unix copyrights to the new SCO Group; it also must show that it owns the rights to derivative flavors of Unix, like IBM’s AIX. Finally, and perhaps most difficult, SCO must prove IBM and other Linux programmers around the world got sloppy and ported proprietary code into Linux. Legal experts tracking the case think each hurdle – let alone all three – is difficult to clear. The odds are clearly against SCO.
Posted by: Alice Marshall on June 23, 2004 12:03 PM
If dumping their stock was their purpose they seem to have succeeded:
http://finance.yahoo.com/q/it?s=scox
Attention investment relations professionals, this information is public and online.
Posted by: TFBW on June 23, 2004 07:07 PM
See further related information at Groklaw.
Posted by: Ran Talbott on June 23, 2004 08:21 PM
“When will the SEC investigate this farce as a potential stock manipulation scheme?”
Probably never: it’s a tough case to make, and Boies’ involvement makes me inclined to believe that it wasn’t a true “pump-and-dump”.
I think it’s more likely that they believed that the lawsuit, while dicey, had enough of a chance of some success that IBM would buy them out (at a nice profit to them) to shut them up. That’s certainly debatable, as a moral issue, but it’s not _illegal_, and it’s not “investor fraud”.
I could be completely wrong about this, since it’s all guesswork. But my opinion is that, if there were a big enough smoking gun around for the SEC to nail SCO, Boies wouldn’t have taken the risk of going down with them. So, even if it really was a pump-and-dump scam, the chances of any enforcement action are extremely small.
Posted by: Jim M on June 23, 2004 09:24 PM
I’ve been mentioning the dumpiing angle for some time now, and it really started right when they started putting out the FUD. Making the case legally may be a tough thing — I don’t know, but it’s pretty clear that’s that is what was going on.
Posted by: Bill Skeels on June 24, 2004 10:30 AM
“Legal experts tracking the case think each hurdle – let alone all three – is difficult to clear.”
They may not be accounting for the abject lack of tech smarts in the courts, though.
Posted by: Bill Skeels on June 24, 2004 10:30 AM
“Legal experts tracking the case think each hurdle – let alone all three – is difficult to clear.”
They may not be accounting for the abject lack of tech smarts in the courts, though.
Posted by: Peter G on June 24, 2004 10:48 AM
Jim —
The pump-and-dump is hard to prove, though doing a month-by-month analysis of the volume of insider sales shows that it looks awfully coordinated. Maybe that’s not illegal. A better way to convict the SCOX insiders is to look at all the related companies and “charities”–Canopy Group, Vultus, Altiris, Angel Partners, and so on.
Posted by: aNonMooseCowherd on June 23, 2004 11:57 AM
When will the SEC investigate this farce as a potential stock manipulation scheme? It seems increasingly likely that no one at SCO ever seriously thought that their legal case had any merit, and that the only reason for pursuing it (and dragging it out so long) was to give insiders a chance to dump a good part of their shares while the stock price was inflated based on their hype.