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A Few More Crumbs Along the RBC Trail
Thursday, October 23 2003 @ 01:02 PM EDT

A lot of folks have been asking why the Royal Bank of Canada would invest in SCO. Some are unhappy about it:

"'This is an irresponsible decision that the Royal Bank is making, both financially and morally,' said Mike Gifford, co-founder of Ottawa-based Linux firm Open Concept Consulting. 'I can't understand why any bank would decide it was a good decision to go off and invest in a failing company that's pursuing a very weak legal argument against a community of developers.'

"RBC spokesman Chris Pepper refused to explain the investment, or how it would respond to any potential complaints from customers who make their living selling open source products. 'We have a policy of not commenting on anything we do for clients,' he said.

"SCO Group spokesman Blake Stowell said BayStar Capital is a private equity crossover fund that makes direct investments in late stage privately held companies, but he had few details surrounding RBC's involvement. 'I'm not sure who approached whom,' he said."

One explanation may be that this isn't the first time RBC has been involved in business with a Canopy Group company. If you note this August 13, 2003 press release from Altiris, you'll see that RBC was one of the underwriters for Altiris' recent stock offering:

"FOR IMMEDIATE RELEASE - 8/13/2003

"Altiris, Inc. (Nasdaq: ATRS) today announced that it has priced the sale of 3,000,000 newly issued shares of its common stock by the Company and 2,000,000 shares of its common stock by a selling stockholder at $18.75 per share. The Company will not receive any of the proceeds from the sale of shares by the selling stockholder. The Company has also granted the underwriters a 30-day option to purchase up to an additional 750,000 shares of common stock to cover over-allotments, if any.

"Credit Suisse First Boston is acting as lead manager in the offering, and the co-managers are Deutsche Bank, RBC Capital Markets, First Albany Corporation and D.A. Davidson & Co."

Wait. Deutsche Bank is listed too, along with RBC. Hmm. That's the same Deutsche Bank that recently put out a buy recommend on SCO that briefly sent the SCO stock price up to the clouds above. If you check the Altiris SEC Amended Registration Statement for Form S3, sure enough, both companies are listed.

And then one more crumb. According to this article in CSO Online, Microsoft's new chief security officer comes to them from RBC:

"'You can have great security without privacy I suppose,' says Peter Cullen, former chief privacy officer of Royal Bank of Canada and newly appointed chief privacy strategist for Microsoft, 'but you can't have great privacy without great security.'"

Well, well, well. Small world, isn't it?

Then, just so you can't say Groklaw isn't thorough, here's one more piece. One of the directors of RBC is Douglas T. Ellis, Senior VP at IBM.




  


A Few More Crumbs Along the RBC Trail | 157 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
A Few More Crumbs Along the RBC Trail
Authored by: Anonymous on Thursday, October 23 2003 @ 01:58 PM EDT
What? Do they think no one will ever notice this stuff?

[ Reply to This | # ]

Senior IBM exec on RBC BOD?
Authored by: Anonymous on Thursday, October 23 2003 @ 02:04 PM EDT
Canada's OSS advocates are upset at the RBC action.
http://www.itbusiness.ca/index.asp?theaction=61&sid=53813

Here's one curious crumb from the above article:

"Earlier this year a group of Linux users formed the Canadian
Linux Interests Coalition (CLIC) with the specific purpose of
campaigning against SCO's Linux claims. Shad Young, CLIC's
president, said RBC's investment was particularly shocking
because a senior IBM executive sits on the bank's board of
directors."

[ Reply to This | # ]

A Few More Crumbs Along the RBC Trail
Authored by: Anonymous on Thursday, October 23 2003 @ 02:07 PM EDT
Simply amazing work PJ. Simply amazing.

[ Reply to This | # ]

Senior IBM exec on RBC BOD?
Authored by: Anonymous on Thursday, October 23 2003 @ 02:15 PM EDT
http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=1600684464&a
mp;tid=cald&sid=1600684464&mid=54880

Miss Cleo has fingered IBM's RBC board member:

Douglas T. Elix, since 2000, Ridgefield, Connecticut. Senior VP
and Group Executive IBM Global Services and IBM Corporation.

http://www.rbc.com/investorrelations/ar_02/pdf/oi_deo.pdf

[ Reply to This | # ]

A Few More Crumbs Along the RBC Trail
Authored by: RoQ on Thursday, October 23 2003 @ 02:18 PM EDT

I don't know anymore, this is getting so convoluted...

Someone should put up a huge Venn (i.e. set) diagram showing who's in the TSG/Canopy set, who's in the Community set, who's in neither, and if there's any intersections between them. Of course, it would have to be updated on an hourly basis, the way things are moving.

RoQ

[ Reply to This | # ]

A Few More Crumbs Along the RBC Trail
Authored by: Anonymous on Thursday, October 23 2003 @ 02:20 PM EDT

Thick as thieves.

[ Reply to This | # ]

Read Groklaw to keep up with SCO
Authored by: Anonymous on Thursday, October 23 2003 @ 02:54 PM EDT
Off topic, but where else to post?

http://www.serverwatch.com/news/article.php/3097751

'The big elephant in the conference center was the SCO question. When asked
about it during the question session following his keynote, Red Hat CTO Michael
Tiemann's response was that Red Hat had "filed opinions in a Delaware
court." When pressed further, he suggested the attendee check out Groklaw,
which has made a cottage industry out of keeping up with SCO.'

[ Reply to This | # ]

A Few More Crumbs Along the RBC Trail
Authored by: Hygrocybe on Thursday, October 23 2003 @ 03:13 PM EDT
PJ, I have no idea if your database can search on this; but I wonder if all the
oblique references to Microsoft can be tagged ? This piece of information about
Peter Cullen is 'innocent until proven otherwise', however I cannot help the
impression that once more another piece in a 'faint, ghost-like background' is
being put in place. I am probably paranoid, but I have the feeling that if all
of these tiny and oblique references to Microsoft could be summarised in a
single document with their associated references, then a very big picture may
suddenly emerge from their combination - which individually is impossible. But
as I said, I am probably paranoid.

Still.........there is an old Roman phrase: Cui bono ? (Who profits ?) which is
particularly apt here. Who would profit from having Linux "stalled for
two years in litigation" ? M'Lud, the prosecution rests.



---
LamingtonNP

[ Reply to This | # ]

A Few More Crumbs Along the RBC Trail
Authored by: radicimo on Thursday, October 23 2003 @ 03:16 PM EDT
I've been pushing the Altiris angle for awhile. The other link that's easily
connected via Altiris is Brian Skiba. He happens to provide analysis on ATRS.

[ Reply to This | # ]

Even RedHat refers to Groklaw
Authored by: Hygrocybe on Thursday, October 23 2003 @ 03:24 PM EDT
For everyone's information, even Red Hat's CTO Michael Tiemann is telling
people with questions about SCO and Red Hat to refer to Groklaw's information
site. I don't think there is any doubt that all players watch Groklaw like a
hawk. The reference:

http://www.serverwatch.com/news/article.php/3097751

---
LamingtonNP

[ Reply to This | # ]

A Few More Crumbs Along the RBC Trail
Authored by: Dave on Thursday, October 23 2003 @ 03:46 PM EDT

As always, PJ, your investigative work is excellent. However, I'd caution you and others against reading too much into these connections.

So far, you've got one incident of involvement with a Canopy company, and one ex-employee now at Microsoft.

I think that, if you looked, you could find much stronger ties between RBC and IBM. Hey, an anonymous poster above already has: he came up with an IBM Senior VP on RBC's Board.

I was in my local RBC branch today, and couldn't help but notice the IBM logo on the client card reader and on the terminal that the teller used to access my account information -- no doubt via an IBM mainframe application. The ATMs (NCR) were the only IT that I saw that wasn't IBM.

Netcraft reports that both rbc.com and royalbank.com are running IBM_HTTP_SERVER (that's just an IBM-tweaked Apache) on AIX (I wonder if they're worried about an audit from SCO).

This IBM case study is a little over a year old, but it seems to indicate that RBC is a customer of WebSphere MQ, DB2, and zSeries (IBM's mainframe server).

I'm still working on finding a number for IBM's annual business from RBC, but I'm pretty confident that it dwarfs the $30 million investment in SCO.

Some people have suggested that RBC is doing this for, not to, IBM, to ensure that SCO doesn't go bankrupt before getting to trial. I'd certainly believe this before any kind of RBC-Canopy-Microsoft conspiracy. More likely, RBC just thinks it can make some money out of this sorry situation.

[ Reply to This | # ]

A Few More Crumbs Along the RBC Trail
Authored by: sam on Thursday, October 23 2003 @ 03:47 PM EDT

I was just looking at the SCO 8-K filed with the SEC disclosing the "investment".

If you are looking for more crumbs, also look at Morgan Keegan & Company, Inc. This is the investment banker that put the deal together.

It also looks like SCO is attempting to change the terms of the deal with their attorneys which includes paying them a portion (20%) of the "financing" and up to another one million bonus in cash and six million in additional shares (at todays prices).

"As part of this modification, which is subject to a definitive agreement, the law firm would receive a contingent fee of 20 percent of the proceeds from certain events related to is protection of SCO's intellectual property rights, including certain licensing fees, settlements, judgments, equity financings or a sale of SCO during the pendancy of litigation or through settlement, subject to certain agreed upon credits for amounts received as discounted hourly fees or prior contingency payments. In addition, this modification may result in the payment to such law firm of up to $1,000,000 and the issuance of up to 400,000 shares of SCO's common stock.

It also looks like Microsoft just dumped an additional $8 million into SCO directly in addition to the first installment from last spring.

"During the quarter ended April 30, 2003, SCO entered into a licensing agreement with Microsoft Corporation (“Microsoft”). The initial licensing agreement allowed Microsoft, at its election, to exercise two options to allow Microsoft to acquire expanded licensing rights with respect to SCO’s UNIX source code. During the quarter ended July 31, 2003, Microsoft exercised and paid for the first of these options. During SCO’s current quarter, ending October 31, 2003, Microsoft exercised and paid $8,000,000 for the second option.

http://www.sec.gov/Archives/edgar/data/1102542/0001104659030230 55/a03-4160_18k.htm

[ Reply to This | # ]

Play the SCO lottery
Authored by: gumout on Thursday, October 23 2003 @ 04:52 PM EDT
RBC can afford a few lottery tickets.

Allowance for loan losses $2.203 billion in 2002.

http://www.rbc.com/investorrelations/pdf/cfsusgaap_02_e.pdf


---
Sir, ( a + bn )/n = x , hence God exists; reply!

[ Reply to This | # ]

New SCO column.
Authored by: mikebmw on Thursday, October 23 2003 @ 07:12 PM EDT
To me this guy is wearing some funny colored glasses. I haven't seen this on posted yet. He seems to almost have a clue but seems to be standing on the wrong side of the fence. Anyway, Rethinking the IBM-SCO Imbroglia

[ Reply to This | # ]

The fat lady's gonna sing ... soon
Authored by: gumout on Thursday, October 23 2003 @ 09:14 PM EDT
PJ I believe a tutorial on Trial Rule 56 -- Summary Judgment -- is in order.

IBM is going to become increasingly aggressive in discovery matters concerning
SCO identifying their System V code and derivative works. The reference they
made concerning McBride showing the code to anyone who was willing to sign an
NDA will not fall on deaf ears. The dog and pony show that SCO has conducted on
the public record will now be showcased before Judge Kimball
If the code is not forthcoming, watch for IBM to file a formal Trial Rule 37(c)
to bar the introduction of the sought after code as evidence.

In the present case SCO is about to collide with the Supreme Court ruling 476
U.S. 1159, 90 L. Ed. 2d 721, 106 S. Ct. 2278 (1986) (holding that summary
judgment is appropriate if the similarity between two works concerns only
noncopyrightable elements of plaintiff work, or if no reasonable trier of fact
could find the works to be substantially similar).

IBM will move for partial Summary Judgment on the derivative works in order to
narrow and ripen the issues. In the preliminary stages of the
abstraction-filtration test used in the Tenth Circuit, Judge Kimball is
responsible for finding if any reasonable trier of fact (jury) could find the
code IBM donated to Linux to be substantially similar to System V code so that
the donated code could be called a derivative work .

If you really believe there is System V code in what IBM donated to Linux then
I've got a bridge for sale. Cheap. Up in beautiful New York State. SCO's case
is probably a lot closer to final judgment than the Royal Bank of Canada
realized... then it's IBM's turn.




---
Sir, ( a + bn )/n = x , hence God exists; reply!

[ Reply to This | # ]

Is "Paul Murphy" a pseudonym for Rob Enderle?
Authored by: Grim Reaper on Thursday, October 23 2003 @ 09:48 PM EDT
Can't find much history on Paul Murphy; however he sounds like the mouthpiece
of Rob Enderle, and they both claim 20 years of IT.

---
For the love of money is a root of all kinds of evil (1 Timothy 6:10); R.I.P. -
SCO Group, 2005/08/29

[ Reply to This | # ]

Paul Murphy
Authored by: skidrash on Thursday, October 23 2003 @ 10:06 PM EDT
If this is the same Paul Murphy I'm thinking of he's pro Linux.

He also for some reason is extremly anti-IBM and pro-SUN.

He wrote some articles criticising anyone using Linux on mainframe a while ago.
I thought those articles seemed well reasoned at the time, but reading his
subsequent slants is turning me around.

He wrote one article near the start of this whole thing saying a SCO win would
be a 'slam dunk', that it was the IBM porting Linux to their mainframes that
SCO was going after.

[ Reply to This | # ]

  • Paul Murphy - Authored by: Wol on Friday, October 24 2003 @ 07:06 AM EDT
  • Paul Murphy - Authored by: egan on Friday, October 24 2003 @ 08:39 AM EDT
  • RE:Paul Murphy - Authored by: Anonymous on Friday, October 24 2003 @ 10:45 AM EDT
Research Request
Authored by: PJ on Thursday, October 23 2003 @ 10:51 PM EDT
Here's another from a Forrester VP, also singing the indemnification song.
http://www.zdnet.com.au/newstech/ebusiness/story/0,2000048590,20280105,00.htm
We already saw the "Paul Murphy" article singing the same lyrics.
That tells us this is likely more coordinated FUD.

If anyone has the time to collect all the times a FUD piece has told IBM to
indemnify, I'd appreciate it. Just post here whatever you find in this thread.

I think it'd be funny and effective.

I'm supposed to be working on some paid work...and a looming deadline makes it
impossible to do the research until the weekend, and we should answer this by
tomorrow, if we can. There's material here on groklaw you can find just by
using the search engine. And google is our friend.

If you can supply a snip of a quotation and a url, that's perfect. No
complete articles, pls., due to copyright. But you knew that already.

thanks.

[ Reply to This | # ]

A Note on Posting Articles
Authored by: PJ on Thursday, October 23 2003 @ 10:59 PM EDT
I would do this privately if I knew who the anonymous poster was, but I don't
know who it was that typed in the FT article. I want to say thank you for your
willingness to help and for your hard work, and it is hard work to do that. I
had to delete it, though, because of copyright issues. Groklaw has to keep its
nose clean.

If anyone wants to send me anything, just click on the envelope on the left of
the page, and you can email me.

Thanks, everyone.

[ Reply to This | # ]

High Pole Warning???
Authored by: PJ on Thursday, October 23 2003 @ 11:15 PM EDT
Any of you financial gurus willing to explain to me what this means:

http://stockcharts.com/def/servlet/SC.pnf?chart=SCOX,P

"High pole warning" on Oct. 20

[ Reply to This | # ]

One More for the FUD files
Authored by: Anonymous on Thursday, October 23 2003 @ 11:29 PM EDT
http://news.com.com/2010-7344_3-5095704.html?tag=nefd_gutspro

[ Reply to This | # ]

Cringley vs Balmer
Authored by: Anonymous on Friday, October 24 2003 @ 04:50 AM EDT
Robert X. Cringle takes a business view and does a good job at debunking Balmer's latest anti-opensource speech at http://www.pbs.org /cringely/pulpit/pulpit20031023.html.

Ken

[ Reply to This | # ]

A Few More Crumbs Along the RBC Trail
Authored by: Anonymous on Friday, October 24 2003 @ 05:34 AM EDT
I'm not sure if I understand this correctly, but maybe you have overlooked this comment:

"RBC spokesman Chris Pepper refused to explain the investment, or how it would respond to any potential complaints from customers who make their living selling open source products. 'We have a policy of not commenting on anything we do for clients,' he said.

I'm not a native english speaker, but how I understand this is that someone else than RBC actually invested, RBC was just a middleman.

[ Reply to This | # ]

...already answered?
Authored by: Anonymous on Friday, October 24 2003 @ 07:43 AM EDT
I wonder if the comments (in the comments section)
to the article would suffice. Especially cypherpunks'
reply seems to pick apart most if not all of the
original Murphy story.

What do you think? -r :-)

[ Reply to This | # ]

A Few More Crumbs Along the RBC Trail
Authored by: Anonymous on Friday, October 24 2003 @ 09:45 AM EDT
Here is a new SEC filing.

Hans

[ Reply to This | # ]

  • sec filing - Authored by: Anonymous on Friday, October 24 2003 @ 10:47 AM EDT
A Few More Crumbs Along the RBC Trail
Authored by: Anonymous on Friday, October 24 2003 @ 10:58 AM EDT
I'm not going to there is no conspiracy here, I don't know that, but I do
think it's entirely possible that RBC sees a probable *short term* gain in SCO
stock. The CDN$ is higher against the US$ right now than it has been in a
while, so RBC could be looking to invest as much CDN$ as possible in stocks that
look like a probable short-term gain. Then they cash out when the CDN$ goes
down, having made money from both the stock and the exchange.

[ Reply to This | # ]

The other license no one wants --
Authored by: tcranbrook on Friday, October 24 2003 @ 12:22 PM EDT
Here is an interesting thing about the MS 'penalty'. Remember the techonology
license that MS was supposed to make available to competitors? Appearently, it
is so expensive and restrictive, that only 9 companies have signed up. And
guess who one of them is:



"To entice more companies to license its technology, Microsoft previously
agreed to reduce from $100,000 to $50,000 a prepayment from rivals and reduce
the price it charges so that it collects 1 percent to 5 percent of the revenues
of the software that includes its technology.

But since that change, only five more companies have signed licenses with
Microsoft, including the Utah-based SCO Group Inc., which has separately
threatened to sue companies using the Linux operating system unless they pay a
licensing fee."

http://www.bayarea.com/mld/mercurynews/business/financial_markets/7094333.htm

(watch for extra spaces)

[ Reply to This | # ]

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