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The SEC, Microsoft and SCO
Monday, March 08 2004 @ 01:36 PM EST

Newsforge has broken a story that the SEC may be looking into a MS-SCO connection and may have been looking into it since complaints began arriving last August. They tell Newsforge that they have had many such complaints and that they take the complaints seriously.

"Whether or not Microsoft is secretly bankrolling the SCO Group for more than $100 million to attack Linux and the general open source community through questionable intellectual property lawsuits, NewsForge has learned that U.S. federal regulators may have begun investigating the relationship between the two companies -- and may also be looking closely at a number of other people and companies connected to them through stock or other business transactions.

"Although the Securities and Exchange Commission (SEC) never officially makes public when it investigates an organization, an SEC staff member told NewsForge that complaints and tips about suspected under-the-table funding, stock-kiting, illegal insider trading, and money-laundering involving Microsoft or Microsoft-connected individuals to the financially struggling SCO Group have been coming into the agency with regularity since last August. The SEC 'does not take such complaints lightly,' the source said."

They have a link to Onecle, where you can find a collection of SCO contracts. Onecle is a website that provides sample contracts and other resources for California attorneys, likely by finding them at court or on SEC filings or by donations from the companies themselves. The contract between SCO and S2 is available here and the entire SCO collection is also available, including Ransom Love's severance agreement and the Canopy-Caldera 1998 Security Agreement.

Newsforge writes that they are not sure if the contract is the actual one, but this S2 agreement is attached to SCO's January 10K, and we have linked to it since January 29. I say this for two reasons: it's legitimate, and two, don't forget the SCO Archives, which is a chronological list of all articles on Groklaw, and our Search function when you are doing research. Newsforge did try to reach me, but I didn't get to their email under my daily blizzard in time. I'll be setting up a media email account. I guess it's time.

If any volunteers would like to help out, I think it would be helpful to go through the archives and list what is covered on each page so we can make the Archives more useful. The titles don't always indicate all the information contained in the article. Once we have it described that way, it will help journalists find what they need even if they don't reach me personally in time. If anyone is willing, please contact me. There is a little envelope icon to the left. Just click on it to email me.


The SEC, Microsoft and SCO | 387 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
URLs and Updates Here
Authored by: PJ on Monday, March 08 2004 @ 03:14 PM EST
Please post updates and news here.

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: BC on Monday, March 08 2004 @ 03:18 PM EST
It would be so Kewl for SCO inflict some nice colateral damage as it goes down!

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: tintak on Monday, March 08 2004 @ 03:22 PM EST
I have a feeling that I had already seen the Haloween X document before it was
news. I drift all over the place on the web, but I can't remember the context
of my searching. Has anybody else seen it elsewhere.
And yes I know. I seem to have missed a scoop:¬(

'it is literally impossible' for SCO to itself provide
direct proof' Mark J. Heise 02/06/04

[ Reply to This | # ]

Don't Expect Much
Authored by: Anonymous on Monday, March 08 2004 @ 03:25 PM EST
Let's be honest: the current administration let Microsoft completely off of the
hook with little more than a slap on the wrist -- after the boys in Redmond were
found to have an illegal monopoly.

While the SEC may be investigating, it is no certainty that they will
"find" anything, and an more remote one that they will punish them for
it. Do not forget that one of SCOG's attorneys is the son of a powerful
senator, one of the same party that's incumbent in both the executive and
legislative branch. Discovery of negative facts, in other words, would be very
inconvenient to the Republicans in an election year.

What would be far more intersting would be the DOJ Antitrust Section to examine
this a little more closely. Any reasonable mind recognizes that Microsoft is
trying to undermine a competitor, albeit a loose coalition of programmers who
have donated their time and energy, not to mention startups and established
computer companies leveraging this into profits. In other words, it's yet
another iteration of Microsoft has always done.

Color me cynical, but in a day and age when a monopoly goes unpunished,
expecting the government to do the right thing may be too much to ask for.

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: old joe on Monday, March 08 2004 @ 03:29 PM EST
Let's not get over excited.

The SEC seeems to prefer to act after the stock has collapsed - because
otherwise the SEC investigation may be seen as the cause of the collapse.

Think of the SEC as the coroner. After SCOG is dead they will perform the
autopsy and only then will we find out what was really happening behind the
scenes. BillG may find himself tied up in court for years over this with his
whole company thrown into confusion by the discovery process while for Linux
this has been not so much a distraction, more an entertainment.

Well I can hope - and it could happen!

[ Reply to This | # ]

I did my (small) part
Authored by: Anonymous on Monday, March 08 2004 @ 03:29 PM EST
I've written the SEC several times, asking them to investigate SCO. I really
didn't think it would make a difference (and maybe it didn't), but now I'd like

to think that it was a (very) small part of getting the SEC's attention.

No doubt, if there is a formal investigation, it will take even longer than the

current set of civil cases. They will be able to prosecute criminally, however.

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: hsmyers on Monday, March 08 2004 @ 03:40 PM EST
From a /. article reference

"Any report that we made a cash payment of seven figures is highly
exaggerated, and it disappoints me that that quote is out there in the
media," Marsh said. "The contract that we signed with SCO specifically
prohibits any party from discussing the economics of the transaction. If you
have an agreement that calls for certain aspects to be protected, then you would
hope that that would be respected."

Does this give EV1Servers CEO Robert Marsh a way out of the agreement?

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: Anonymous on Monday, March 08 2004 @ 03:44 PM EST
It seems to me that it would be an anti-trust violation if Microsoft had urged
other companies to fund a company filing lawsuits against Microsoft's greatest

I also think it would lead to a civil suit against Microsoft for trying to
undermine Linux. IBM would be a complainant, but it might be joined by:


Novell (now that they own SuSE). Novell would love to sue
Microsoft, since it owned enterprise network services
until Microsoft stole most of its market share.

Sun -- hates Microsoft, and is now a big Linux player with
the Java Desktop

Consumer Electronics companies (Sony, Phillips, etc). Maybe, since SCO wants to
charge $32 per embedded chip. They would love to get some leverage over
Microsoft, like to get better terms for its DRM software.

Probably not:

HP -- is on both sides of the fence

Dell -- not its fight, it sells the same number of computers
no matter what the operating system.

[ Reply to This | # ]

SCOX Down Since 12pm EST
Authored by: Anonymous on Monday, March 08 2004 @ 03:44 PM EST
This story was posted at 3:40 GMT, or roughly about the same time SCOX starting
dipping slightly today. Perhaps the marketplace is finally getting wary of SCOX
shares? They are currently 11.29 a share. Things have not gone well for SCOX
the past seven or so days.

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: Anonymous on Monday, March 08 2004 @ 03:47 PM EST
"f any volunteers would like to help out, I think it would be helpful to go
through the archives and list what is covered on each page so we can make the
Archives more useful. The titles don't always indicate all the information
contained in the article."

Also there can be really valuable information in the posts, like some contract
that Harlan uncovered.

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: Anonymous on Monday, March 08 2004 @ 03:47 PM EST
The SEC will take it seriously whenever it gets other companies making said
allegations. It will still REQUIRE proof of course, not just suspicions. I
don't know if they will find the required proof, but if they do I would now
support the option of busting up Microsoft. I did not think that would be the
proper solution last time..... I am not a big fan of Microsoft, but they are
still a very competitive company.... Maybe force Microsoft to to license
components individually and allow other companies to build different competitive
distributions of Windows.

[ Reply to This | # ]

What about the FTC?
Authored by: Jude on Monday, March 08 2004 @ 03:51 PM EST
I'd think the FTC would be a more appropriate agency to investigate some of
SCO's behaviour, particularly their seemingly extortionate "Linux
license" program.

I filed a complaint with them months ago, but their response was that they don't
act on individual complaints: They look for patterns of problematic behaviour.

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: Anonymous on Monday, March 08 2004 @ 03:56 PM EST
With friends like SCO, who needs enemies?

I am continually amazed at the willingness of SCO to trash just about anyone close to it, let alone its perceived enemies.

In the particular instance of the leaked email, we have SCO saying:

"...We believe the e-mail was simply a misunderstanding of the facts by an outside consultant who was working on a specific unrelated project to the BayStar transaction, and he was told at the time of his misunderstanding," said SCO spokesman Blake Stowell..."

In other words, at the time SCO took Anderer out behind the woodshed and spanked him for being stupid.

I wonder how Anderer feels, being chumped like this?

SCO sure knows how to win friends and influence people...

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: TerryL on Monday, March 08 2004 @ 04:15 PM EST
Hmmm, expect more reports and claims that "The Linux Community has been
spreading lies and rumours about SCOG and it's business to interfer with, and
hamper, it's legitimate bussiness activities".

Of course they themselves wouldn't do anything underhand like that (like writing
to congress or whatever) would they?

All comment and ideas expressed are my own and do not necessarily reflect those
of any other idiot...

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: Anonymous on Monday, March 08 2004 @ 04:17 PM EST
Look beyond the price at the volume. It is down a little (2% or so) but the
volume is quite high today comapred to the number of shares held by the public.

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: keanu on Monday, March 08 2004 @ 04:35 PM EST
I read this evening the Helloween I doc on

There's an interesting comment mentioning SCO:

"Linux is on track to eventually own the x86 UNIX market and has been the
only UNIX version to gain net Server OS market share in recent years. I believe
that Linux -- moreso than NT -- will be the biggest threat to SCO in the near


[ Reply to This | # ]

  • oldSCO - Authored by: Anonymous on Monday, March 08 2004 @ 05:05 PM EST
Nmap not alone
Authored by: AdamBaker on Monday, March 08 2004 @ 04:40 PM EST
Nmap isn't the only free software that is dropping support for SCO. I saw a post
on the OmniOrb mailing list in response to an OpenServer problem today from the
maintainer saying

"If there are any problems with omniORB's build on SCO OpenServer, I have
to say that I'm disinclined to modify omniORB's build to fix them, owing to
SCO's crusade against Linux and the GPL."

One program won't kill them, 2 won't either but if enough authors take this view
then the current products revenue stream should dry up even faster than it has

[ Reply to This | # ]

SEC defends one of its own? The Lehman Brothers connection.
Authored by: Turing_Machine on Monday, March 08 2004 @ 04:42 PM EST
I've read above about how the SEC won't really hurt MicroSoft, using a previous
example of the anti-trust case, etc. This case is different. Now it will
affect one of the industries' own, in the issue with Lehman Brothers. Now the
SEC is investigating something that may affect the overall health of the
investing sector, driving up costs to investors, etc. I think that the SEC may
take this a bit more seriously than whether IE can be successfully uninstalled.

No, I'm not interested in developing a powerful brain. All I'm after is just a
mediocre brain, something like the President of the AT&T --Alan Turing

[ Reply to This | # ]

Questions about SCO's sub-attack on the GPL....
Authored by: on Monday, March 08 2004 @ 04:47 PM EST
/tinfoil hat on

Hypothetical: If company A is infringing by using GPL'd code within their
products, clear derivitives, not modules or linking issues....

Company B is making a run at the GPL, if they fail, they are hit for THEIR
per-copy basis, is company A as well?

Company B is making a run at the GPL, if they were to succeed, does that absolve
company A for offenses committed PRIOR to the ruling?

More techie in nature, the BSD community may be more aware of how to check, but
how would one clarify if a derivitive product was coded from openly available
source PRIOR to the ruling, and a derivitive made after the fact? (Timestamps

IANAL, IANAP, IAAC (I am a Canadian)

[ Reply to This | # ]

The devil's advocate
Authored by: Anonymous on Monday, March 08 2004 @ 04:52 PM EST

Well... no, I'm not going to suggest that TSG has a valid complaint against Linux.

What I'm wondering is... is there some way that anyone at The SCO Group, or within Microsoft, could benefit from completely destroying The SCO Group? Is it possible that the plan is far more complex than mere McBridian greed? Or am I giving TSG/Canopy/Microsoft too much possible credit? It just seems like TSG's actions are too stupid not to be deliberate and calculated actions on the part of someone. If TSG is a sacrificial bishop in this lifesized game of Chess...

Whoops, forgot to take off my tinfoil hat...

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: Anonymous on Monday, March 08 2004 @ 05:03 PM EST
Not being an American I can not judge the meaning of this message very well. But
Since i'm educated by groklaw along the way I believe I can imagine what such a
action by sec could do in our ( the open source people ) favor.

I guess.....

The Lawyers at Micro$oft can turn this baby around in any case what so ever.
THAT company is still to powerfull ( STILL, just hang on ) for such or any claim
for that matter to stop it from doing anything they want. BUT as this gets more
real for both sides this may be very welcome thing in the SCO funding bit. This
could make a dent in M$ but it could blow SCO of it's socks. No way M$ is going
to pay for the defence on this trial !.

Retep _ i'm dutch by the way ... sorry for that _ vosnul

[ Reply to This | # ]

Authored by: Slimbo on Monday, March 08 2004 @ 05:06 PM EST
I was flipping through Eweek and I actually took the time to read one of MS's
anti-linux adds. It was comparing the cost per megabit of throughput per second
between Linux and Windows server 2003. Linux was $40.25 per megabit of
throughput per second and Windows server 2003 was $1.79 per peak request per
second. That much of a difference is what caught my eye.

Linux was run on an
IBM z900 main frame while Windows server 2003 was run on a run of the mill dual
900MHz Xeon server. Now is it just me or is this like comparing the price per
mile between a Rolls Royce (Z900@$479,118) and a Dodge Neon (900MHz
Xeon@$25,440)? The prices are from MS's Get the facts web site.

If you really want a fair test put them on the
same machine and have a go at it.

Didn't see any place else to post it.


[ Reply to This | # ]

Authored by: Anonymous on Monday, March 08 2004 @ 05:08 PM EST
This from a pretty bright guy on the YAHOO board:

SCO is taking their sweet time finalizing the SEC registration statement. The
clock started ticking October 16, 2003. What is taking so long? Evidently, the
SEC has decided to review the registration statement and possibly other SEC
filings. Is the SEC review complete yet?

From the 8-K regarding the PIPE deal:

“The “Registration Deadline” means (i) the ninetieth (90th) day following the
date hereof if the Registration Statement receives a “no review” from the SEC;
(ii) the one hundred thirty-seventh (137th) day following the date hereof if the
Registration Statement is reviewed by the SEC; or, (iii) the one hundred
fiftieth (150th) day following the date hereof if, in connection with reviewing
the Registration Statement, the SEC also reviews the Company’s filings with the
SEC pursuant to the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
“Exchange Act”).”

We are on day 125. This means that the SEC *is* reviewing the registration
statement. It also means that the date at which the statement must be final is
approaching. SCO only has either 12 more days or, depending on the scope of the
SEC review, 37 more days. SCO may be using an SEC review as a reason for
delaying finalization of the registration statement.

[ Reply to This | # ]

Wishful Thinking
Authored by: Anonymous on Monday, March 08 2004 @ 05:09 PM EST
I strongly have the impression that Newsforge does not really reports the news,
but rather is making the news.
Or at least tries to.
" The SEC may have begun an investigation ..."
Based on what ?
A phone-call ?
What answer did you expect to the question asked ?

[ Reply to This | # ]

Power of IBM versus Microsoft
Authored by: Anonymous on Monday, March 08 2004 @ 05:22 PM EST
I wonder who is more powerful, Microsoft or IBM.

Since veryone talks about MS-monopoly money,lobby-networking, bribery etc,
basically that nobody can do anything against MS because of their power(bush

Doesnt IBM have their influenes also in government etc.?

[ Reply to This | # ]

SCaldera is a perfect SEC target
Authored by: Mike B on Monday, March 08 2004 @ 05:25 PM EST
Actually, SCOX is a perfect target. They are a minnow of a company, do not have
the resources to drag out the proceedings, and represent ALL the crimes of
Enron, Global Crossing, Adelphia, etc in one package.

Even if political considerations keep MS from getting fallout (I don't think so,
particularly STATE AG's will jump on it) SCO has no friends and many enemies.

Novell is ALSO a Utah company, so that negates a lot of their home cooking
there. RedHat is one of the most important tech companies based in North
Carolina (IBM also employs more at their site in RTP (I once worked there) than
they do anywhere else) and the state has a vested interest in seeing Linux
business advance. Not to mention IBM is a NEW YORK corp.

SCO looks like Martha Stewart to regulators: A company they can bring down to
put a notch on their belt, that doing so won't have major political fallout.

SCO isn't large enough to line ANYONE'S pockets.

[ Reply to This | # ]

The GOOD, Bad and UGLY....
Authored by: Anonymous on Monday, March 08 2004 @ 05:35 PM EST
Well, I'm just wondering - is it possible that SCO group is behind Microsoft support rumors? 'Leaked' memo? Nobody in the right mind would ever acknowledge existence of any 'leaked' memos. Yet Blake Stowel acknowledge memo published in HelloweenX. Is it possible that SCO is hinting that there is a big fat Microsoft with deep cash pockets behind them, while they are burning through the cash and will have to cease operations in 9 month?

[ Reply to This | # ]

After the bancrupcy?
Authored by: technoCon on Monday, March 08 2004 @ 05:38 PM EST
Hypothetical question time.

Suppose party A wants to damage party B and gives party C a pile of money to
spend in barratry. Party B defends itself in court and party C goes out of
existence with the action unsettled.

1) Can B continue the action to resolve questions of law and fact raised by
defunct party C?

2) If B is damaged by the barratry, I presume that B can seek damages of C, and
possibly pierce the corporate veil of C. But can B also go after A.

For example, I hire my ex-wife's neighbor to file suit against her about a
property line, claiming a Spanish Land Grant or somesuch. She wins and is
awarded damages that exceed the neighbors assets. I then hire another neighbor,
and another. At what point does the law say my actions aren't exactly cricket?

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: blacklight on Monday, March 08 2004 @ 06:12 PM EST
The SEC has subpoena powers: I am sure that Microsoft, the SCO Group and Canopy
have fascinating tales to tell.

[ Reply to This | # ]

OT: Memorandum in opposition of Novell's motion to dismiss?
Authored by: davep on Monday, March 08 2004 @ 06:23 PM EST
Wasn't Friday the (extended) deadline for SCO to file this?

Not sure how to go about looking for this myself.

[ Reply to This | # ]

Choose UNIX Instead of Linux ? (never)
Authored by: JustFree on Monday, March 08 2004 @ 06:26 PM EST
I just read that is back online. When I checked there site to verify this I noticed more FUD.

"Five Reasons to Choose UNIX® Instead of Linux®"

There must be other legal entities out there that should be interested in SCO actions. This could be the reason that SCO is spreading FUD, and suing everyone.

It should be Reason for ignoring SCO.

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: Anonymous on Monday, March 08 2004 @ 06:34 PM EST
Better better yet, don't be a Known Democrat. Martha's take: $51k.

The Enron folks take was in the millions ... but Kenny-boy is a personal friend
of pretzel-boy, so that's not mentioned ....

[ Reply to This | # ]

Obligations of Mr. Love
Authored by: Anonymous on Monday, March 08 2004 @ 06:36 PM EST

"Mr. Love also agrees to refrain from making derogatory or disparaging statements about Caldera and its current and past customers and employees, or making such statements as may serve to undermine Caldera's image to the public."

I've always wondered why Mr. Love would have nothing negative to say when they turned his Linux company into an anti-linux company. I don't know much about the man, but if you found a company on linux and spend so much effort fighting MS with Dr-DOS, I'd guess you'd be pretty peeved when, after you leave, its name changes to SCO, they start claiming linux is evil, and start dealing with MS.

[ Reply to This | # ]

SCO's Motion to Remand to State Court
Authored by: beast on Monday, March 08 2004 @ 06:45 PM EST

Motion to Remand

Delay is the deadliest form of denial. - J. Northcote Parkinson

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: Anonymous on Monday, March 08 2004 @ 06:57 PM EST
I was just wondering today if some of our friends at SCO aren't just a little
nervous lately.
A jury of 12 has just unanimously convicted Martha Stewart on all counts --
felonies that carry prison time.
It seems the current sentiments in the courts are not very lenient towards those
who would mess around with the stock exchange system. Lying isn't very popular
In a climate that convicts Martha Stewart, what chance can Darl, Chris, and
Blake have? (And let's not forget ol' Ralph!)

[ Reply to This | # ]

OT: 4.4BSD-Lite Anyone?
Authored by: soronlin on Monday, March 08 2004 @ 07:22 PM EST
Does anyone have a working link to download 4.4BSD-Lite please? If so please
email, no need to create a huge OT thread. Thanks.

[ Reply to This | # ]

Questions about S2/SCO contract.
Authored by: on Monday, March 08 2004 @ 07:25 PM EST

Re: Section 5.2 / Confidential Information:

This Section shall not apply or shall cease to apply to information supplied by
(1) if it has come into the public domain without breach of confidence by IC;
(2) which was known without restriction of disclosure to IC prior to its first
receipt of the same from SCO;
(3) which is hereafter rightfully furnished to IC by a third party without
restriction on disclosure; or
(4) is required to be disclosed pursuant to any statutory requirement or court
order. In the event Confidential Information is required to be disclosed by any
statutory requirement or court order, IC shall promptly notify SCO in writing
and, upon SCO's request, shall assist SCO in obtaining a protective order and
opposing such disclosure.

Re: 5.2.4 : Does this mean that if ordered to produce documentation by the
courts, that S2has to let SCO know, and if SCO asks them to, they *HAVE* to
fight producing documents?

I ask because it seems an awful lot of these agreements seem to have clauses
that make it easier to initiate legal action to stall.

Re: 6.0 Intellectual property.
6.1 SCO, and its suppliers as appropriate, own all right, title and interest in
and to SCO software and materials [including, but not limited to, all patent,
copyright, trade secret and other proprietary rights embodied therein, whether
or not specifically recognized or perfected under relevant laws.] IC shall not
interfere with or jeopardize SCO's title and interest in SCO software and
materials or take any action toward acquiring any rights in SCO Provided

Is it just me or is the part I've placed within the [] equivelant to 'even if we
dont have a ruling, or legal proof of our claim' ?

Re: 9.0 Insurance

Commercial General Liability (occurrence form), including Contractual Liability,
in a combined limit for Bodily Injury and Property Damage—$1,000,000 per

Re: 9.1.2 : Is this LESSENING, or INCREASING S2's liability for 'contractual
liability' (make him break the contract, new person to sue?)

IANAL, IANAP, IAAC (I am a Canadian)

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: kberrien on Monday, March 08 2004 @ 08:03 PM EST
Caught some dicussion on Yahoo board about buying detailed market data and I
guess doing some analysis (why wait for the SEC I guess).

Apparently you can get it here, for a cost.

That could be interesting to see its behavior over a long period. Kinda like
the Yahoo folk are getting a little serious and actually doing something..

Wow, did I just say that?

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: Anonymous on Monday, March 08 2004 @ 08:26 PM EST
This Informationweek article by John Foley has some interesting info about the
dynamic duo's relationship:

[ Reply to This | # ]

OT: Forbes get's it all wrong on CA and linux license
Authored by: Anonymous on Monday, March 08 2004 @ 10:07 PM EST
Can you believe the confusion in this story from Forbes?

At Forbes, are they evil, or just nudnicks?

[ Reply to This | # ]

The big plus here
Authored by: Anonymous on Monday, March 08 2004 @ 10:10 PM EST
The big plus here is not that the SEC will necessarily do anything. The big
plus here is that it's likely that this memo and the SEC sniffing around (along
with other federal regulators) is going to scare MS out of giving SCO any more
money. In other words, by publishing this memo we may have deep-sixed one of
SCO's big sources of FUD money.

Sun wouldn't dare help them anymore. If they did they would get a reputation as
a "SCO Lover" and become pariahs among the greater Unix and IT
communities. (in other words, their customers.)

So, they may now be on their own to bleed to death and die.

[ Reply to This | # ]

The SEC, Microsoft and SCO
Authored by: Anonymous on Monday, March 08 2004 @ 10:46 PM EST
Here's a question that's kind of odd. Is SCO required to disclose in their SEC
filings that they're being investigated by (ironically) the SEC? Or the FTC,
DoJ, state attorney general or any other fraud/consumer protection agency? What
document on Edgar do such disclosures typically show up in?

[ Reply to This | # ]

Question: What is stock price redemption trigger for BayStar deal?
Authored by: Bystander on Monday, March 08 2004 @ 11:30 PM EST
The recent downward progression of price for SCOX stock has me wondering about
the redemption features built into the BayStar financing deal. It was my
understanding the investors renegotiated the deal to provide downside protection
for their investment, and that a new floor price was established below which
they could demand redemption of their convertible Class A preferred shares for
cash. Am I totally off base in my belief?

I've tried searching on the internet for the stock price which could trigger a
redemption of the Class A preferred shares, but could only find sections from
the S-3 filings that referred to redemption triggers without citing what those
triggers were. I remember seeing elsewhere that activation of such a trigger
allows the investors to demand repayment of their $50 million in cash, but I
can't recall seeng the specifics of the trigger (trigger price and length of
time the stock price must remain below the threshold).

If the stock price was approaching the redemption trigger point, wouldn't SCO be
forced to do anything and everything to prop up the stock price? Would they have
the resources to survive the forced repayment of $50 million cash?

[ Reply to This | # ]

What IP?
Authored by: Anonymous on Tuesday, March 09 2004 @ 02:46 AM EST
What IP was purchased? MS Unix utilites come from internix which uses OpenBSD.
If SCO was paid, what where they paid for? The use of Linux perhaps (gpl'd
software) or was it a donation?

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It took almost a century to break up AT&T.
Authored by: Anonymous on Tuesday, March 09 2004 @ 03:24 AM EST
Before I get to the main point I would like to point out
something. The present Microsoft judge is a Clinton appointee. The judge that
burned Microsoft real good
was a Reagan appointee.

Robert Bork just argued against Microsoft in the appeal.
Ken Star just wrote an op-ed piece against Microsoft.
A lot of your stance depends on not on your political affiliation but on where
you are standing.

If the administration would like to go after Microsoft,
it would do so in a way to minimise damage to the economy.

I think Kerry would be less likely to go after MS than Bush,
because Bush would be a lame duck, and not care how badly
atacking MS would hurt the economy. Kerry OTOH would have to run for reelection.
So he doesn't want to hurt the economy.

In any case, I would not expect anything to happen until
after the election.

Now on to my main point.

It took almost a century from the time the government looked
at AT&T to the time it broke it up. The first wound in AT&T
was not inflicted by the government it was inflicted by MCI.

From where I look, I do not believe the SEC will hold back.
At present it is some career personel working in the SEC
looking at this. By the time some political appointee looks
at it, there will be enough to charge SCO executives. I don't think that any
administration will be able to avoid
looking at Microsoft. If some memo leeks, that would be a political disaster in
this age of Enron, Global Crossing and WorldCom. They are not going to risk

Once the stock fraud part is being tried, IBM can join in
on the civil antitrust side. Then some state can pick up
the ball and bring criminal antitrust actions. Then the DoJ
will have to follow.

So the DoJ will suddenly find itself in the middle of an
antitrust action without even realising it!

The funniest part. The stock fraud part might hurt worse
than the antritrust side.

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Could SCO be doing the world a favour?
Authored by: Anonymous on Tuesday, March 09 2004 @ 09:55 AM EST
Here's a little idea.....

M$ gets involved with a small company in order to (in an illegal way) crush
competition. This small company is unfortunately run by complete idiots who
then pull themselves into trouble, thereby opening Pandora's box and exploiting
all of the behind-the-scenes actions performed illegally by M$.

The SEC gets involved and M$ finally gets sentenced. The fact that this Small
COmpany also disappears, while on the way nicely proving the worthiness of the
GPL, strengthens the opposition.

WE all live happily ever after, THEY go to jail.

Tin hat idea? Hopeless optimism? I dunno.

My 2cents.

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The SEC, Microsoft and SCO
Authored by: pooky on Tuesday, March 09 2004 @ 10:31 AM EST
Wow S2 made a lot from the Microsoft deal(s). Assume for a second that S2
arranged the Baystar investment and arranged the known Microsoft licensing.
That's about $75 million combined ($50M for Baystar, $25M for Microsoft).

$250,000 for the Microsoft License
$1,000,000 for the Baystar investment (assuming 2% stated in section (i) or
covered in (iv) which is "negotiated".

And possibly more. SCO has percentages of all of this going all over the place.
%'s to Boies, %'s to S2, %'s to Morgan Keegan. Just how much of their revenue do
they get to keep, and how accurately are the paid out sums being reported in
their SEC filings?


Veni, vidi, velcro.
"I came, I saw, I stuck around."

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SCO Stock Price
Authored by: Anonymous on Tuesday, March 09 2004 @ 02:50 PM EST
Like a slow drip, the SCO stock price is ever so slowly going down.


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The SEC, Microsoft and SCO
Authored by: Anonymous on Wednesday, March 10 2004 @ 02:17 AM EST
Dear Conspiracy Theorists (aka, the easily persuaded),

It seems every post confirms/expands the going theory that Microsoft is somehow
behind SCO's actions and the Halloween X memo is factual (rather than the
rantings of an underpaid consultant). In the words of Dr. Evil - Right. I
might be swayed by this less than perfect logic if I didn't know how to read a
SEC filing. These are the facts:

1. Microsoft and Sun have paid a combined $26 mil for SCO's IP. Not $100 mil+,
as ESR claims. Not $86 mil. $26 mil. That's it.

2. SCO has not received any additional income from Microsoft, Sun or anyone
else. It just hasn't happened.

3. There is no connection - insider or otherwise - between Baystar, Microsoft,
Sun or anyone else in this drama. This is about money - SCO and Baystar are
trying to make it on Linux. By the way, IBM, Novell and RedHat are, too. Be
careful who you sleep with, my friends.

Take the tin hats off. Go home. Write code, for goodness sake. But give it
up. You want it to be true, but it isn't. The facts aren't there.

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An Interesting Old Article RE:
Authored by: cwbinko on Wednesday, March 10 2004 @ 03:16 AM EST
After reading the NewsForge "Investigative Journalism" this evening, I went digging. After one attempt on Google, (q="Silicon Stemcell"), I found this article:
Firm seeks to protect ideas
It basically says that way back in 1999, SiliconStemcell was starting up with the idea of pursuing IP litigation as a business model:
"Our goal is to protect, extend and acquire intellectual property," said Anderer, who's Silicon Stemcell's president and chief executive officer
Now, I don't think this is earth-shattering, but I thought Groklaw might find it an interesting read.

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