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[P]
Let's Put SCO Behind Bars

By MichaelCrawford in Op-Ed
Thu Aug 07, 2003 at 01:03:48 PM EST
Tags: Software (all tags)
Software

While the lawsuits being defended by IBM and filed by Red Hat are likely to put an end to The SCO Group's menace to the Free Software community, I don't think simply putting the company out of business is likely to prevent us from being threatened this way again by other companies who are enemies to our community. I feel we need to send a stronger message.

If we all work together, we can put the executives of the SCO Group in prison where they belong.

If you live in the U.S., please write a letter to your state Attorney General. If you live elsewhere, please write your national or provincial law enforcement authorities. Please ask that the SCO Group be prosecuted for criminal fraud and extortion.


It makes me very sad to write this, because I lived in Santa Cruz for fifteen years. Sam Sjogren, a close friend from Caltech, was one of SCO's first programmers, and for a little while my only friend in town after I transferred to UCSC. Many of my best friends used to work for SCO either writing code or doing tech support. I even used to sit in the company hot tub with my friends who worked there from time to time. I used to dance to the music of SCO's company band Deth Specula at parties around the town.

Before I ever installed my first Linux distro - remember Yggdrasil Plug-n-Play? - I was a happy user of a fully-licensed copy of SCO Open Desktop on my 386.

You wouldn't think the SCO Group of today is the same company that once had to tell its employees that they shouldn't be naked at work between 9 and 5 because they scared the visiting suits from AT&T. That's because it's not - the SCO Group got its name and intellectual property from SCO through an acquisition. I don't think any of the friends I once knew at the company are likely to still be working there. The SCO Group is in Utah. SCO was originally called The Santa Cruz Operation, a small father-and son consulting firm named for a beautiful small town between the mountains and the ocean in central California. The Santa Cruz Operation was once as much a bunch of freethinking hippies as any Linux hacker of today.

Yes, it makes me sad. But I digress.

It seems that SCO is asking a license fee of $699 for each Linux installation. Take a look at SCO's press release announcing the licensing program. That's just the introductory price - if we don't purchase our licenses before October 15, the price will increase to $1399.

I have three computers that run Linux. That means SCO claims I must pay $2097 today, or $4197 if I wait until after October 15. SCO says their fee applies even to devices running embedded linux, many of which were purchased by their owners for far less than SCO's "license fee".

My response is that SCO is guilty of criminal fraud and extortion. I didn't violate SCO's copyright or acquire their trade secrets through any illegal means, and it is fraud for them to claim that I did. It is extortion for them to tell me I must pay them money to avoid a lawsuit.

Even if SCO's claims are true, it is not a violation of their copyright for me to possess a copy of their code. Instead, any copyright infringement was committed by the vendors who supplied me with the Linux distributions I use.

SCO's license is actually no license at all - if it really is found that the Linux kernel contains any infringing code, the GPL forbids everyone who possesses a copy from using it at all. No one would be allowed to continue using Linux until the improper code was removed. Only then could we begin using a new version, and we could never again use the versions that have any illegally obtained code in them, new versions for which SCO could not claim to be owed any fees.

The fear of economic harm that SCO is creating through its groundless claims is sufficient to establish a charge of extortion under the Hobbs Act.

Rather than paying their fee, my response will be to write a letter to the Maine State Attorney General to ask that they prosecute SCO. I'm going to include substantive documentation, like a hardcopy of SCO's claim that I must pay them this fee, as well as IBM's and RedHat's responses to SCO.

I'm also going to write to the Federal Trade Commission to ask that SCO be investigated for illegal trade practices.

If you live in the United States, I ask you to write a similar letter to your state Attorney General, as well as to the Federal Trade Commission. If you live in a state where a Linux distro vendor is located, or a company that has a lot of Linux installations - doesn't Amazon use it? - write to your elected representatives to ask that they work with the state and federal law enforcement authorities to see that these business are protected.

If you live in a different country, write to the head of your national or provincial law enforcement agency, and write to your government to request that it protect Linux businesses and users in your country. Certainly every German should be clamoring to protect SuSE, and every Frenchman should be crying out for the French government to protect Mandrake.

SCO may be guilty of other crimes as well, but only certain parties have standing to complain. To file a frivolous lawsuit is an offense known as barratry, for which not only SCO but its attorneys may be prosecuted. But if this is the case it is up to IBM to bring it to the attention of the authorities.

SCO may be guilty of violating securities law. I understand its executives have engaged in questionable insider trading, possibly to take advantage of the artificial inflation in SCO's stock price resulting from its allegations. The stock of companies offerring Linux products and services may have been unfairly devalued as well. Stockholders in any of the affected companies - either SCO or its competitors - may wish to avail themselves of the Security and Exchange Commission's Investor Complaint Form to ask that something be done about this.

If you have the financial means and are willing to go to the trouble, please consider filing your own lawsuit to get an injunction against SCO. I'd like to see how they deal with such lawsuits going on in all fifty states simultaneously. I don't think even SCO has the money to pay that many lawyers. Perhaps this would be a good project for the larger Linux user groups.

The National Association of Attorneys General provides this Full Contact List for the Attorneys General. Perhaps people who live in other countries can reply by giving the addresses of the legal authorities your countrymen should write to.

Please send your complaint in a written letter, sent via snail mail. They will pay more attention to letters than email. Be reasonable, rational, and as brief as possible. Include some supporting documentation, such as relevant press releases from SCO, Red Hat and IBM, as well as the legal complaints from SCO and (if they make it available) Red Hat.

Be sure to tell your Attorney General where they can find the suspects:

The SCO Group
355 South 520 West
Suite 100
Lindon, Utah 84042 USA
Phone: 801-765-4999
Fax: 801-852-9088
http://www.sco.com/

Consider posting the text of the letter you will write as a reply to this article so others may use it as an example.

It would help to include in your letter an estimate the total license fees that would have to be paid by residents and businesses of your state, nation or province if SCO's threat is allowed to stand, and to emphasize that many of those who are threatened are in no position to pay.

Please copy and distribute this article according to the terms of the following legal notice:

Copyright © 2003 Michael D. Crawford.

This work is licensed under the Creative Commons Attribution-NoDerivs License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nd/1.0/ or send a letter to Creative Commons, 559 Nathan Abbott Way, Stanford, California 94305, USA.

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Poll
Will any SCO execs go to prison?
o Yes 6%
o Maybe 13%
o Unlikely 42%
o No 36%

Votes: 119
Results | Other Polls

Related Links
o defended by IBM
o filed by Red Hat
o The SCO Group's
o the executives
o Attorney General
o Caltech
o UCSC
o Deth Specula
o a beautiful small town
o SCO is asking a license fee of $699
o SCO's press release
o the Hobbs Act
o SuSE
o Mandrake
o barratry
o Investor Complaint Form
o Full Contact List for the Attorneys General
o Red Hat
o SCO
o http://www .sco.com/
o http://cre ativecommons.org/licenses/by-nd/1.0/
o Also by MichaelCrawford


Display: Sort:
Let's Put SCO Behind Bars | 282 comments (231 topical, 51 editorial, 0 hidden)
Yes, SCO are guilty (2.77 / 9) (#2)
by President Saddam on Wed Aug 06, 2003 at 03:40:34 AM EST

of over-defending their intellectual property, but it's something most large companies with legal departments do these days. Sure, they may have made serious errors of judgement and you may disagree with their perspective, but that's no reason to call for them to be jailed. That's the kind of response you'd expect in some third world dictatorship!

I'm sure the courts will find against SCO. Until then, there's no need for these hysterical portents of doom. And linking to slashdot doesn't do much for your argument.

---
Allah Akbar

SCO has committed other crimes as well (4.00 / 4) (#4)
by MichaelCrawford on Wed Aug 06, 2003 at 03:54:07 AM EST

You have a valid point, but consider that many who hear of SCO's threats may be so frightened or poorly informed legally that they pay the license fees. It's likely many people and companies will pay who really cannot afford it. It's likely to be financially devasting to some. Consider the case of a mom-and-pop web hosting service that has dozens of linux boxes connected to a load balancer. Some people may lose their businesses, their jobs, or their homes.

What SCO is doing is just as criminal as the con artist swindle of asking trusting old people to withdraw their life savings from the bank to "assist in an investigation" of the bank's employees.

There are other crimes SCO has committed as well, but most of us do not have standing to complain about them. It is a crime to file frivolous lawsuits. Not only SCO's executives, but their attorneys could go to prison for it. However, it's up to IBM to complain about that.

Possibly they could be prosecuted for securities fraud as well, for the effect that their accusations are having on the stock prices of IBM and other Linux vendors, as well as SCO's own stock. The stockholders of the companies involved, or the executives of the companies affected, are going to have to raise the issue with the Securities and Exchange Commission.


--

Live your fucking life. Sue someone on the Internet. Write a fucking music player. Like the great man Michael David Crawford has shown us all: Hard work, a strong will to stalk, and a few fries short of a happy meal goes a long way. -- bride of spidy


[ Parent ]

Basically, what you're saying is (4.00 / 4) (#16)
by President Saddam on Wed Aug 06, 2003 at 05:22:31 AM EST

It's likely many people and companies will pay who really cannot afford it. It's likely to be financially devasting to some.

Won't somebody PLEASE think of the retards? Let's face it: anyone who pays SCO the license fee isn't exactly an intellectual powerhouse. But the ironic thing is that if it weren't for Slashdot, few would know about the licenses to begin with.

---
Allah Akbar
[ Parent ]

Over-defending? (4.20 / 5) (#8)
by khym on Wed Aug 06, 2003 at 04:08:30 AM EST

After making accusations that the Linux kernel has stolen code in it, they refuse to say which code, which is really strange, since you think they'd want their stolen code to be removed. They say they won't openly release which code is stolen because they want to protect their IP, but the cat is already out of the bag. There isn't anyone out there thinking "Boy, I wish SCO would hurry up and say which code is theirs, so then I could copy just that code from the kernel into my own product!" If anyone is going to copy code from the kernel into their own products, they're going to do it based on the code's function, not who wrote it; the only reason to not openly release the identity of all the disputed code is (besides insanity) is that they don't have a case that will stand up to public scrutiny.

--
Give a man a match, and he'll be warm for a minute, but set him on fire, and he'll be warm for the rest of his life.
[ Parent ]
Yeah, sure. (1.25 / 4) (#3)
by megid on Wed Aug 06, 2003 at 03:47:13 AM EST

As if anyone with the remotest bit of power would EVER go to prison. Are you really thinking this SCO guys have no backing (MS springs to mind, e.g.) to try some shit so stupid as going against IBM? We are witnessing some powergaming at its best.

Nice try, though. Go ahead. The moral "right" is certainly on your side. About as much as those of Iraqis wishing US troops to go away. But I digress.

--
"think first, write second, speak third."

Sorry (3.37 / 8) (#5)
by HermanMcGuigan on Wed Aug 06, 2003 at 03:57:08 AM EST

Getting the respective governments of the world to protect Mandrake, SuSE, Red Hat, etc, is kind of silly.

SCO isn't claiming that they own these entire distributions, but these distributions are distributing code (within the Linux kernel), some of which probably belongs to SCO. So there are two options for people who want to protect these distributions: Try and convince the distrubitor in question to:

1. Recall all previous products that contained Linux 2.4.x kernels.

2. Replace the Linux kernel in their respective current distributions with a kernel that is not in violation of copyrights, and does not contain IP that was not intended to be placed under the GPL.



How? (4.66 / 6) (#65)
by greenrd on Wed Aug 06, 2003 at 11:49:50 PM EST

Replace the Linux kernel in their respective current distributions with a kernel that is not in violation of copyrights, and does not contain IP that was not intended to be placed under the GPL.

That's a nice idea, but it has one very fatal flaw.

SCO has consistently refused to reveal what lines of code they allege are infringing.

Red Hat has asked them. SCO won't give a straight answer. They continue to beat around the bush. They won't even give a credible answer for why they won't give an answer.

In this situation, what would you advise Red Hat, Mandrake, SuSE, and other Linux distributions to do?

Why should they downgrade to pre-2.4 kernels, as you suggest, if (a) that will irreperably harm their business and (b) they cannot even guarantee that their own patches will not still leave them still in violation?

Why doesn't SCO allow the distributors to fix the problem? They cannot morally (nor, I would hope, legally) claim ongoing harm after this date when they have blatantly rebuffed attempts to resolve the issue.


"Capitalism is the absurd belief that the worst of men, for the worst of reasons, will somehow work for the benefit of us all." -- John Maynard Keynes
[ Parent ]

Nor legally. (none / 0) (#232)
by DavidTC on Sun Aug 10, 2003 at 04:02:42 PM EST

You are correct: The correct remedy under copright law is for them to notify people what is infringing. Until they do that, and give people a chance to remove it, they cannot sue at all. (Of course, they can still sue if they do that, and you do remove it, to recover past damages...but they can't sue until they do it.)

-David T. C.
Yes, my email address is real.
[ Parent ]
No solution (3.00 / 1) (#136)
by gidds on Thu Aug 07, 2003 at 08:41:34 PM EST

1. Recall all previous products that contained Linux 2.4.x kernels.

At which point SCO would casually reveal that the offending code was in 2.2. Or whatever version they switched to.

SCO has said enough suspect/unlikely/impossible things already - what's one more to them?

Andy/
[ Parent ]

To reiterate (3.00 / 2) (#162)
by peretzpup on Fri Aug 08, 2003 at 01:00:34 AM EST

SCO just distributed a 2.4 kernal to me via ftp three fucking hours ago. How can that possibly be considered unintentional at this stage of the game? Here, help yourself.

[ Parent ]
No (3.33 / 27) (#7)
by jjayson on Wed Aug 06, 2003 at 04:04:13 AM EST

This is like the second time you have asked us to write a letter to support your pet cause. Having the information of who to write to is fine, but the three paragraphs of begging, above the fold (followed by an entire article of whining) are not how to do it. All it takes is a single sentence at the end: "If you agree and would like to help, then please write you state AG." Don't ask, beg, or tell us to do it.

So, no.

Especially on something as tenuous as this. Do you not think that IBM would have the AG on SCO's asses if there was a case possible? Do you not think that IBM would take SCO to civil court if even a slight possibility existed?

Who really cares. SCO is dying (and not in the "Netcraft confirms" way either). They don't need help, nor do people need to be tying up resources for something that is inevitable. Winning a battle against SCO, in a scenario that nobody believes SCO has a chance at, doesn't send any sort of message in the future besides the fact that you don't know how to pick and chose your battles. What happens if you get an AG to go after SCO and win? The next time the AG will just blow off your request thinking that their office already did something for the Free Software wacko-nutcase group. Why waste political clout?

Also, the first four paragraphs below the fold need to be deleted. I don't give a fuck if you knew people at the original SCO. I don't give a fuck if you hung around with the company before it changed hands. I don't give a fuck if there were pervents running around naked that should have been fired. I really don't give a fuck, especially after you go through half your damn article telling us this then tell us that the old SCO no longer exists and the IP has just changed to a new group called similarly, The SCO Group. And why should I give a fuck?

Also, I -1 all article with pretentious licensing at the bottom. And how strange it is for you to license this under an agreement that prevents derivative works, yet talk about your Free Software community? Doesn't the FS community that you profess to be a part of try to explicitly allow derivative works (and RMS's first incident was him trying to make a change to a closed printer driver)? Or does that only apply to software that you use and not your ramblings that you feel so free to dump on us?

--
"Fuck off, preferably with a bullet, if you can find one that's willing to defile itself by being in your head for a split second." -

jjayson is an angry, angry person...but right [nt] (3.50 / 4) (#12)
by Aemeth on Wed Aug 06, 2003 at 04:39:36 AM EST


...mathematics may be defined as the subject in which we never know what we are talking about, nor whether what we are saying is true.
Bertrand Russell


[ Parent ]
yeah... (3.80 / 5) (#17)
by jjayson on Wed Aug 06, 2003 at 05:23:25 AM EST

Don't you hate it when that happens? It throws the whole universe out of whack.
--
"Fuck off, preferably with a bullet, if you can find one that's willing to defile itself by being in your head for a split second." - Parent ]
No... (4.33 / 3) (#103)
by Aemeth on Thu Aug 07, 2003 at 05:00:06 AM EST

...this world needs more angry (and more importanly sensible) people to vocalise what most(?) of us believe.

...mathematics may be defined as the subject in which we never know what we are talking about, nor whether what we are saying is true.
Bertrand Russell


[ Parent ]
You're right, (4.33 / 12) (#14)
by President Saddam on Wed Aug 06, 2003 at 05:05:40 AM EST

begging people to agree with you is despicable. Bullying is the proper way to get things done.

---
Allah Akbar
[ Parent ]

fuck (1.40 / 5) (#22)
by fhotg on Wed Aug 06, 2003 at 07:56:00 AM EST

I don't give a fuck if there were pervents running around naked that should have been fired.

Nobody gives a fuck to know that you have psychological problems due to a repressed sexuality.

Otherwise you're right.
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

[ Parent ]

you sad fucker (2.33 / 3) (#213)
by starsky on Sat Aug 09, 2003 at 02:53:19 AM EST

mod bombing me. sad bastard. bet you wish you could zero people eh?

[ Parent ]
I didn't modbomb anyone kid (2.00 / 1) (#219)
by fhotg on Sat Aug 09, 2003 at 11:00:55 AM EST

I didn't zero you, because I then would antisocially undermine the consensus of this community what zeros are intended for. Like you, sweetie.
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

[ Parent ]
Yes (2.00 / 3) (#253)
by starsky on Tue Aug 12, 2003 at 08:31:49 AM EST

I'm sure you found the two comments of mine from two totally different stories you 1'd within 20 seconds without just going to my list of comments and selecting a couple to rate down.

[ Parent ]
yes, (none / 0) (#254)
by fhotg on Tue Aug 12, 2003 at 09:47:30 AM EST

your idea of what makes a "modbombing" is a pretty innocent one.
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

[ Parent ]
bah (2.00 / 3) (#255)
by starsky on Tue Aug 12, 2003 at 10:52:49 AM EST

modbombing is where you retaliate against some supposed crime (like moding down one of your lame comments) by modding down 1 or more of the modder. Just because you're too lazy to do it properly doesn't make you not guilty.

[ Parent ]
boh (none / 0) (#259)
by fhotg on Tue Aug 12, 2003 at 03:45:44 PM EST

if the "retaliation" hits a comment that truly sucks and deserves a "1", is that modbombing too ?

How can anyone with a life outside K5 be concerned about how people they don't know "rate" their comments and by what motivation ? This is just childish.
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

[ Parent ]

nobody loves you. (2.00 / 5) (#73)
by rmg on Thu Aug 07, 2003 at 12:38:27 AM EST

how does that make you feel?

_____ intellectual tiddlywinks
[ Parent ]

what? (3.00 / 6) (#105)
by jjayson on Thu Aug 07, 2003 at 05:15:10 AM EST

I should be more concerned if I was looking for love on the Net. I have real life for friends and love. I have K5 to annoy liberals, Democrats, anarchists, socialists, communists, geeks, fanboys, nerd, and you.

kiss, kiss.
--
"Fuck off, preferably with a bullet, if you can find one that's willing to defile itself by being in your head for a split second." - Parent ]

so what you're saying is... (3.50 / 4) (#126)
by rmg on Thu Aug 07, 2003 at 12:14:16 PM EST

that you're a troll?

_____ intellectual tiddlywinks
[ Parent ]

And... (3.00 / 3) (#138)
by Canar on Thu Aug 07, 2003 at 08:56:05 PM EST

A conservative one at that. Looks like the hordes are getting bored with the neo-liberal-commie trolls...

[ Parent ]
IBM (4.00 / 1) (#151)
by ucblockhead on Thu Aug 07, 2003 at 10:03:01 PM EST

IBM is now suing. Expect SCO stock to be worth didly soon.

But otherwise, you are right. The way to deal with this sort of thing is not through stupid "community" pranks like calling their 800 number (why not just TP the headquarters building?) but through the actual legal system.
-----------------------
This is k5. We're all tools - duxup
[ Parent ]

the peanut gallery must have hard seats... (2.00 / 1) (#168)
by wrinkledshirt on Fri Aug 08, 2003 at 01:55:36 AM EST

...for you to be so needlessly cranky about the article. Just my two cents. I found the content of your own response to be far more tedious and irrelevent (advice: if you fancy yourself an editor, write editorial responses) than the content within the article, and wouldn't have even bothered replying if it weren't for the couple of twits who'd decided to rate your comment any higher than a 2 (those aren't sock-puppet accounts, are they...?).

And anyway, if the AG were to go after SCO and win, they wouldn't turn around and refuse similar cases, especially if they were this high-profile and the AG folks were already comfortable with arguing about new tech issues in court (especially if they'd had a hand in establishing some precedent). Government lawyers didn't stop prosecuting murderers immediately after they nabbed their first one. Lord knows where your rationalization for that one came from.

[ Parent ]

GNU Documentation License not for everything (5.00 / 3) (#182)
by dh003i on Fri Aug 08, 2003 at 10:08:49 AM EST

The GNU Documentation license is not for all forms of writing. It is only mostly useful for very technical writing, without any opinions stated. The Creative Commons license is a good license for things like opinion, stories, and so-on and so-forth, probably because the author doesn't want his words to be perverted, perhaps because he feels that the way in which he stated matters was most effective.

Furthermore, if you had any knowledge what-so-ever of the law, you would know that without him placing that copyright notice at the bottom of his work, you'd have no right to distribute it what-so-ever. Just because something is posted on the internet doesn't automatically mean that, under the law, everyone has the right to distribute it.

By the way, the Creative Commons No-Derivs license can't prevent all derivs from being made. Remember, copyright protected expressions of ideas, not ideas themselves. You could take notes on the ideas he's written, and re-write them in a completely different fashion.

Social Security is a pyramid scam.
[ Parent ]

Supporting evidence (5.00 / 6) (#9)
by Entendre Entendre on Wed Aug 06, 2003 at 04:12:06 AM EST

Even as SCO loudly demands its licensing fees for the 2.4 kernel, SCO quietly offers the 2.4 kernel source for download under the terms of the Gnu Public License.

--
Reduce firearm violence: aim carefully.

GNU GPL (4.50 / 4) (#89)
by artis on Thu Aug 07, 2003 at 02:39:26 AM EST

As in GNU General Public License.
--
Can you know that you are omniscient?
[ Parent ]
You posted this on /. as well, didn't you? (nt) (3.00 / 4) (#10)
by Akshay on Wed Aug 06, 2003 at 04:29:07 AM EST



He did (none / 0) (#120)
by mge on Thu Aug 07, 2003 at 09:31:39 AM EST

I recall seeing it in a comment to one of the thousands of SCO stories they are running now.

[ Parent ]
Advogato and InfoAnarchy too. (4.00 / 2) (#127)
by MichaelCrawford on Thu Aug 07, 2003 at 03:52:50 PM EST

What part of "copy and distribute" don't you understand? Do you think if I'd said that I wouldn't be doing it myself?


--

Live your fucking life. Sue someone on the Internet. Write a fucking music player. Like the great man Michael David Crawford has shown us all: Hard work, a strong will to stalk, and a few fries short of a happy meal goes a long way. -- bride of spidy


[ Parent ]

just a quick question (4.00 / 5) (#13)
by the77x42 on Wed Aug 06, 2003 at 04:46:22 AM EST

what is SCO and why are they charging for linux?


"We're not here to educate. We're here to point and laugh." - creature
"You have some pretty stupid ideas." - indubitable ‮

SCO's quibble with Linux (4.80 / 5) (#18)
by HermanMcGuigan on Wed Aug 06, 2003 at 05:41:42 AM EST

As I understand it, SCO - the Santa Cruz Operation, is an organization that did, amoung other things, pioneering work on x86 Unix, as well as purchased the rights to the original Unix System V copyrights and patents. Now, many companies have licensed this code from SCO for use in their own propreitry Unix systems, but somehow or other, some of this code has crept into the Linux kernel. Some of it was leaked in by IBM, who licensed this code for use in its own propreitry AIX Unix system. IBM also became involved with Linux, using Linux in some of its key business solutions. IBM wanted to improve these solutions by improving Linux itself, and so added code, some of which SCO alledges was its own property.

Now, despite the anti-SCO feeling throughout the community, companies do not launch billion-dollar lawsuits or make allegations without any basis at all. It's qutie likely that the Linux kernel does contain SCO code, and something has to be done about it. The GPL is a great thing for code freedom, but it doesn't protect people who add propreitry code to a GPL'd project without permission from the IP owner who holds the copyright to that code from possible legal consequences. In addition to this, SCO have set up a license fee for Linux users of Linux distributions which contain the offending code (allegedly, any distribution utilizing the 2.4+ series kernels), which will indemnify them from legal prosecution. If SCO code has indeed been leaked into these kernels, SCO's license fee idea is perfectly acceptable, although, in my opinion, they are charging a bit much.



[ Parent ]
wow (5.00 / 2) (#19)
by the77x42 on Wed Aug 06, 2003 at 06:03:02 AM EST

even if that's not 100% correct (although it very well may be), I am assuming it is because you've explained it so elegantly :)

thanks!


"We're not here to educate. We're here to point and laugh." - creature
"You have some pretty stupid ideas." - indubitable ‮

[ Parent ]

Yeah. (3.50 / 2) (#43)
by lonemarauder on Wed Aug 06, 2003 at 08:28:25 PM EST

Now, despite the anti-SCO feeling throughout the community, companies do not launch billion-dollar lawsuits or make allegations without any basis at all. It's qutie likely that the Linux kernel does contain SCO code, and something has to be done about it.

Quite likely? heh. First of all, the code in question is not "SCO code". They have a contract with Novell to distribute Unix, which is an amalgam of code from a large number of sources. Not only did they not author the IP in question, they don't even own it.

If identical code appears in both the Linux kernel and in Unix, two possibilities exist. One is that they share a common ancestor (ever heard of BSD?) Another is that they deliberately copied the code from the Linux kernel as part of a corporate exit strategy. This may sound like an insane conspiracy, but remember that only a few months ago they were distributing Linux themselves as part of Caldera and UnitedLinux. Why would they suddenly wake up one day and decide to do a 180 and start suing the existence of Linux? Right about the time they started getting big money in "license fees" from Microsoft?

Could it be possible that they are using a lawsuit for gains other than actually winning said lawsuit, and that the charges are patently false? I realize that misusing the American legal system may be hard to imagine, especially among the very rich, but that hardly makes any of your conclusions "likely".



[ Parent ]
RE: SCO's quibble with Linux (4.00 / 3) (#46)
by FlipFlop on Wed Aug 06, 2003 at 08:43:33 PM EST

One of these statements is true:

  1. companies do not launch billion-dollar lawsuits or make allegations without any basis at all.
  2. Company executives don't sell off their stock when they expect to win a lawsuit worth 20 times as much as the company.

Now, many companies have licensed this code from SCO for use in their own propreitry Unix systems

Microsoft bought a license from them last quarter, allowing SCO to turn its first profit since Darl McBride became CEO.

somehow or other, some of this code has crept into the Linux kernel. Some of it was leaked in by IBM, who licensed this code for use in its own propreitry AIX Unix system.

Those are the very claims in dispute. SCO has made those allegations, but has not presented any evidence to back them up. According to SCO CEO Darl McBride, presenting evidence would be akin to letting a criminal wipe his fingerprints off the gun.

If SCO code has indeed been leaked into these kernels, SCO's license fee idea is perfectly acceptable

SCO is attempting to exploit a possible loophole in the GPL. SCO is offering to sell you the right to use a GPL'd product, without granting you the rights required by the GPL. Since SCO isn't actually distributing* the code, they aren't technically violating copyright law.

*In reality, SCO is still distributing Linux kernel 2.4.19. But if they weren't, they might actually have a sustainable argument. As for this being acceptable, I respectfully disagree.

AdTI - The think tank that didn't
[ Parent ]

The two might contain the same code. (3.50 / 2) (#206)
by haflinger on Fri Aug 08, 2003 at 07:20:08 PM EST

However, if the code was rewritten, it doesn't matter. If Linus ran into a problem that SCO also ran into, and they both solved it the same way - even right down to using the exact same opcode sequence - it doesn't matter, because Linus never read any SCO code and so he couldn't have copied the code.

You have to actually copy, not imitate, to violate copyright. Independent creation is a defence.

If IBM had any sense, they would have set up a clean-room operation. IBM's lawyers are generally the best of the best. This smells like a desperate business trying to go for some big pockets and hoping IBM pays them off.

Did people from the future send George Carlin back in time to save rusty and K5? - leviramsey
[ Parent ]

What if SCO are right? (4.40 / 5) (#15)
by squigly on Wed Aug 06, 2003 at 05:19:59 AM EST

They might have a valid reason for not releasing the code.  IANAL, so I have no idea what that reason is.   Their arguments that it is not GPLed may even be valid (risky though since that would mean they're breaching copyright when offering Linux as a download).

One way or another, this will be proved in court.  Evewn if they settle with IBM, someone will refuse to pay for a licence, and wil demand that SCO show the juice.  

Wait until it's shown that their case has no merit at all.  Then have them charged with extortion.

It has been shown (5.00 / 6) (#41)
by FlipFlop on Wed Aug 06, 2003 at 08:02:45 PM EST

Wait until it's shown that their case has no merit at all. Then have them charged with extortion.

As far as SCO's claims against users, it has already been shown that their case has no merit.

SCO has no case under trademark law (they don't even own the UNIX trademark). They have no case under trade secret law (they may have a case against IBM, but as far as everyone else goes, any knowledge ceased to be a 'secret' as soon as it was published around the world). SCO has made no claims of patent infringement. If they have any, they would likely have expired long ago.

The only remaining "intellectual property" law is copyright. Copyright provides authors with six exclusive rights, none of which is use. The law allows anyone to use a copyrighted work (otherwise it would be illegal to borrow a book).

AdTI - The think tank that didn't
[ Parent ]

That's a position paper (none / 0) (#101)
by squigly on Thu Aug 07, 2003 at 04:44:31 AM EST

It's not a legal judgement, just a legal opinion.  Until a court states categorically that SCO don't have a case, that has no greater bearing than SCO's demand for a licence.

[ Parent ]
On the other hand... (5.00 / 1) (#125)
by Znork on Thu Aug 07, 2003 at 11:03:39 AM EST

It's a legal opinion from a professor of law, and an opinion that actually has a basis in the law.

The fact that his opinion actually has a legal basis makes it slightly more reliable than SCO's claims that because there are pink flying elephants on the planet Vooroon (we have evidence and selected tinfoil hat alien abductees have agreed that the pictures are reliable) you must pay us $699 or risk being sued.

[ Parent ]

don't forget (5.00 / 1) (#135)
by martingale on Thu Aug 07, 2003 at 08:13:21 PM EST

Linus has been flaunting the UNIX community twelve years now. Enough is enough. Oh yeah, and he is able to deploy patches in 45 minutes.

[ Parent ]
releasing the source (none / 0) (#169)
by jeti on Fri Aug 08, 2003 at 04:56:47 AM EST

First of all, the source already is released with the 2.4 kernel series. SCO just denies to identify what portions they claim to be under their copyright.

SCO argues that if they identified the code, it would be removed, destroying the evidence. This is pretty ridiculous. You could just give a copy of the current source to a notary and keep it as evidence. Both parties would certify that the signed code is unmodified.

Now that evidence crap is sorted out, removing any offending code ASAP is what would and should be done. The legal system agrees on this.

[ Parent ]

Let us put lunix hippies behind bars (2.81 / 11) (#23)
by etc on Wed Aug 06, 2003 at 07:59:42 AM EST

There, they can do some useful work.

its dangerous to be open source (2.25 / 4) (#24)
by phred on Wed Aug 06, 2003 at 08:13:36 AM EST

especially in prison showers!

[ Parent ]
Check (3.60 / 28) (#25)
by godix on Wed Aug 06, 2003 at 08:14:42 AM EST

Whiny rant about SCO. Check.
Ignorant about the law. Check.
Stupid sig. Check.
Blind faith the government can fix everything. Check.

Someone please notify Rob Malda that one of his users has escaped. Until the user is re-captured please, PLEASE use caution when approaching. Slashdot users are known to cause headaches and lower your logic abilities when taken is large doses. However if the user starts forthing at the mouth do not worry, they are incapable of hurting you. They might attack, sure, but their twinkie and Code Red diet has left them to weak to cause any physical harm.

"Fuck... may be appropriate in certain venues... (Florida Elections Commission, speed eating contests, public defender offices) and may be inappropriate in

Resection to Humor (2.27 / 18) (#28)
by thelizman on Wed Aug 06, 2003 at 09:02:02 AM EST

So your solution is to jail anyone who tries to protect their rights (regardless of whether or not they were right in doing so). Good one...and when will you start jailing users of Windows? And are MacOS users second class citizens for using a bastardized 'nix based on BSD?

Honestly...this has to be meant as humor. Even if it is, it's crap.
--

"Our language is sufficiently clumsy enough to allow us to believe foolish things." - George Orwell
The Crime is "Stock Manipulation" (4.71 / 7) (#30)
by OldCoder on Wed Aug 06, 2003 at 09:57:18 AM EST

The SCO Group executives are trying to bail out their bankrupting company with a facetious One Billion Dollar lawsuit against IBM. This has raised the stock price of the company. The executives might sell some stock during this period to cash in before SCO is crushed by IBM's lawyers. Under some conditions, that can be a Federal Crime in the US, just as it was for Enron.

The victims of the crime are those who purchased SCO stock (symbol SCOX) under the fraudulant belief that SCO could win.

--
By reading this signature, you have agreed.
Copyright © 2003 OldCoder

errr... no.. (4.33 / 3) (#32)
by Danse on Wed Aug 06, 2003 at 10:56:38 AM EST

The victims of the crime are those who purchased SCO stock (symbol SCOX) under the fraudulant belief that SCO could win.

No, those people are commonly known as "morons."




An honest debate between Bush and Kerry
[ Parent ]
Most victms of fraud are morons (4.33 / 3) (#108)
by squigly on Thu Aug 07, 2003 at 07:39:53 AM EST

The law tends not to protect those who lie and deceive to get what they want.

[ Parent ]
Even more (none / 0) (#148)
by X3nocide on Thu Aug 07, 2003 at 09:47:47 PM EST

are witting accomplices. Ask any collections agent who's had to deal with fraudulent collections.

pwnguin.net
[ Parent ]
simply selling stock high (none / 0) (#179)
by dh003i on Fri Aug 08, 2003 at 09:38:30 AM EST

Simply selling your company stock high because you know or think that your company is going to take a downturn, or that it might take a downturn, is not and should not be an action that places someone in jail. Many regular employees can do this, based on their superior knowledge of the business. Really, all money on Wall Street that is made above the index' is made by those who have more knowledge at the expense of those who have less. This is not a crime. Tough for the people who don't actually do their research, but that's their own fault.

However, engaging in a fallicious lawsuit against IBM which has no possibility of winning, with the intent to cash in on the stock rise, should land one in jail.

Social Security is a pyramid scam.
[ Parent ]

Certain insider trades will land you in prison. (2.00 / 1) (#183)
by MichaelCrawford on Fri Aug 08, 2003 at 10:32:13 AM EST

One reason the insiders have to file all those disclosure forms is to help catch illegal insider trading.

Simply selling when your stock is high isn't illegal, no. However, dumping your stock because you have prior knowledge of an upcoming event that will cause the stock price to plummet is a felony, if that event is not public knowledge.

Insiders are not allowed to trade on information that's not available to the general public. That just wouldn't be fair.

That's what Martha Stewart is accused of doing. She dumped a lot of stock in a biotech firm the day before the announcement that the firm's experimental drug had failed to get FDA approval. She claims the sale occured because she had placed a "limit order", a standing order to make a trade when a stock reaches a certain price.

Apparently the SEC and the FBI aren't buying her story, and if they're able to prove that she placed the order because she knew the stock was about to tank, then she's going to be decorating the concrete walls of her prison cell with Martha Steward Coordinates.

Similarly, if our friends at SCO are selling off their stock because they expect the price to drop, and they haven't already filed an SEC disclosure of the reason it's going to drop, or at least issued a press release, then they're going to do hard time.

That's one reason they have filed all the embarrassing disclosures that you can find on their website. They specifically point out that the public outcry resulting from their harrassment of IBM and the Free Software community might cause SCO's stock price to drop.

However, one reason they might have to believe their stock will plummet is they know they have no hope of winning their lawsuit. If it can be proved later on that they knew all along their case had no merit, after the stock sinks, and a lot of investors lose money, they're going to get handcuffed, searched, fingerprinted, have their mug shots taken, probably bailed out for a while but ultimately get to spend some time in prison.

Quite aside from punishment any offences they may have committed by harrassing us linux users.

Particularly delicious is that one punishment the SEC typically imposes for insider trading is that one is forbidden from trading stocks anymore, sometimes for a period of years, sometimes for the rest of your life. Another is that one may be forbidden from ever again being an officer of a corporation.


--

Live your fucking life. Sue someone on the Internet. Write a fucking music player. Like the great man Michael David Crawford has shown us all: Hard work, a strong will to stalk, and a few fries short of a happy meal goes a long way. -- bride of spidy


[ Parent ]

bah. (none / 0) (#184)
by pb on Fri Aug 08, 2003 at 11:03:22 AM EST

The "Martha Stewart" fiasco is a disgusting scapegoat, and perhaps not even an example of insider trading at all.

As the newspapers will tell you, "By selling when she did, Stewart avoided losses of $45,673." (ABC News); however, let's look at that number in perspective. The woman is a multi-millionaire. In fact, it's estimated that the negative press surrounding this stupid "scandal" literally lost her hundreds of millions of dollars due to the stock price of her company plummeting.  It would be like making an illegal trade and ultimately losing $40,000 to save yourself $4. Is that $4 worth prison time? Would a reasonable person commit a felony to save four bucks, or less than 0.01% of their assets?

In the meantime, who should the SEC be investigating? Well, they could start with the people who sold even earlier, to save themselves millions of dollars; after all, that's the only reason Martha knew about it in the first place. With all those executives dumping stock, it's obvious that something was going on--in fact, the media was reporting it in the morning, so I'd say it was even public knowledge!

So I'd say that what the SEC is doing here is absolutely criminal. There's no reason to go after Martha Stewart when there are far bigger fish to fry here, people who profited far more than she did, and who the SEC would have a much stronger case against. What would we say if the FBI organized a sting, and could have caught a few drug lords, but instead went after one of their alleged customers? The only obvious explanation would be corruption, I'd think.
---
"See what the drooling, ravening, flesh-eating hordes^W^W^W^WKuro5hin.org readers have to say."
-- pwhysall
[ Parent ]

I never thought I'd support Martha Stewart... (5.00 / 1) (#188)
by Ricdude on Fri Aug 08, 2003 at 12:48:26 PM EST

...but it sickens me that we are wasting much of our legal system's resources chasing a profiteer on the order of $45,673, when Enron and Worldcom executives are hiding behind the alleged charade of plausible deniability for substantially greater swindles.

As much as it physically pains me to say it, "Go get 'em, Martha.  Good Luck!"


[ Parent ]

try reading the entire article (2.00 / 1) (#193)
by dh003i on Fri Aug 08, 2003 at 02:46:03 PM EST

Try reading the entire article. You've selectively quoted one portion of it, and ignored what came after. The author goes on to state that due to the SEC's unconstitutional use of it's unconstitutiona judicial, executive, and legislative powers, "insider trading" has been extended to "outsiders".

Had you read that, you would not be arguing with individuals (like the author of the article you quoted) who certainly know more about law, constitutionaly, and the mechanics of "insider" and "outsider" trading.

If you want to have something intelligent to say on insider/outsider trading, I'd suggest you read the articles in full (particularly the four specific ones I linked to). Insider trading can indeed be a good thing, because it can prevent stock-prices from becoming over-inflated.

The language on Mises.org is not false. It is frank and blunt. If you consider the truth to be "inflammatory", then tough for you. Really, what this amounts to is that you want the government to protect you from losing money on Wall Street, when that responsibility should rest with you. Maybe the language is harsh in some cases. That's because the government's violation of private property rights and of the constitution is insulting to the dignity of free men, and is -- quite frankly -- a definite march towards communism (ever since FDR, the US has been slowly but surely marching towards communism).

If an insider is selling a stock, then you should wonder *why*. In many cases, it may not signal that anything's wrong with the company at all. Texas Instruments had a wave of insider selling stock early on. As a result, the market was paranoid -- something *must* be wrong with TI if insiders are trading. Bzzt! Wrong! Dead wrong. Insiders were selling because they'd made huge profits already on the stock, and wanted to lock in some of those profits, invest elsewhere, diversify, and so-on and so-forth. The general market was too stupid to look beyond the press-releases and do the necessary research to realize that. Phil Fisher, however, wasn't. He knew that the company was solid (because he thoroughly investigated it via 'the business grapevine'), and invested in it very very early on. He's held onto the stock ever-since, which has 10-bagged again and again.

In other cases, insiders will be selling because something is fundamentally wrong with the company. It's really quite irrelevant, because individuals who aren't investing in companies for the long-term are idiots anyways (even in the best-run companies, there are always short-term set-backs). If they are selling because of some short-term set-back, that should be completely irrelevant to the intelligent investor, who should be investing in a company because s/he has done extensive research that indicates that company will generally expand and increase in profitability for many decades to come. If they are selling because the company is fundamentally unsound in the long-run, then the intelligent investor should know that anyways through diligent research.

Martha Stewart has no more obligation to tell those she's selling to that she's selling because she has knowledge of some short-term set-back, than would the investor who researched a company thoroughly and kept tabs on it (e.g., Lynch and Fisher) have obligation to tell the buyer that he's selling because the company is fundamentally unsound and run incompetently.

And what would be the result if Stewart hadn't sold those stocks? The buyer would have *bought* anyways, just from someone else. The stock still would have dipped in the short-run, because Steward buying or selling has nothing to do with the short-term setback. And in this case, the buyer is obviously a moron, because he's whining about one of the inevitable setbacks that happens in business. No-one is entitled to a profit, neither short-term nor long-term. If you want a short-term profit, you have no-one to blame but yourself when one of these inevitable setbacks happens. Stewart disclosing this information wouldn't have changed that, but only accelerated the down-turn in time, and possibly made it worse. The investors were fucked the minute the FDA rejected this drug, whether they knew it or not, whether Stewart sold or not, because eventually that information would work it's way to the market. If you want someone to blame for stock's short-term setback, you can blame the FDA.

Now, any intelligent buyer in this corporation that Stewart sold would be investing because s/he thinks this company is selling at a reasonable price, is run excellently, has integrity in management, and meets all of <a href=http://www.fool.com/specials/2001/sp010118.htm>Fisher's other 15 critiria for a corporation to be a worthwhile investment</a>.

I don't feel sorry for those who whine about short-term setbacks that only could have been avoided by insider knowledge. If you invest in the stock-market for short-term games, you're an idiot anyways, and are taking extreme risks. If, on the other hand, these whiners invested in this company for the long-run, this short-term setback is completely irrelevant.

It is obvious to me that you haven't actually thought about this at all, since you seem to think that somehow, if Stewart had acted differently, the stock-holders wouldn't have experienced this short-term decline in stock-value. (from the whining buyer's perspective),Really what this is about is that you envy her and want to punish her because she didn't lose as much money as you did, even though nothing she could have done would have helped, but only marred.

Social Security is a pyramid scam.
[ Parent ]

actually, (none / 0) (#208)
by pb on Fri Aug 08, 2003 at 11:58:47 PM EST

It seems to me that you totally missed the point of my post, as I happen to agree with that link I cited, and did indeed read that article in its entirety. Maybe you should try reading my post again, instead? I'd also like to mention that you didn't link to anything (perhaps due to a posting fluke), and I never linked to mises.org (and neither did that article I linked to, although it did cite it) and still have not.

In any case, as I've already mentioned, I think the SEC should be going after real crimes (like insider trading) instead of chasing after less likely ones, (like "outsider trading", which could involve no insider knowledge whatsoever) and if you work on your reading comprehension, maybe you can save yourself some posting and ranting time in the future.
---
"See what the drooling, ravening, flesh-eating hordes^W^W^W^WKuro5hin.org readers have to say."
-- pwhysall
[ Parent ]

ah. (none / 0) (#209)
by pb on Sat Aug 09, 2003 at 12:07:43 AM EST

I now see that your entire reply to my comment was a posting mishap. Apologies all around, I suppose. Although it's interesting to see that mises.org was mentioned somewhere both in your thread and in my link; go figure.
---
"See what the drooling, ravening, flesh-eating hordes^W^W^W^WKuro5hin.org readers have to say."
-- pwhysall
[ Parent ]
yes, apologies (5.00 / 1) (#222)
by dh003i on Sat Aug 09, 2003 at 12:01:56 PM EST

Yes, I misposted in response to your comment. I was alternating between a response to your post and one to the other guy's post, and guess I forgot about yours but accidentally posted my response to his comment as a response to yours.

In any case, I agree with you. The SEC is wasting our money going after Martha Stewart.

Social Security is a pyramid scam.
[ Parent ]

statist non-sense (4.00 / 2) (#186)
by dh003i on Fri Aug 08, 2003 at 12:06:48 PM EST

Simply selling when your stock is high isn't illegal, no. However, dumping your stock because you have prior knowledge of an upcoming event that will cause the stock price to plummet is a felony, if that event is not public knowledge.

Oh please, this is such bullshit. All knowledge is for the most part public knowledge. It's just that the public is too lazy to seek it out. Should we place brilliant investors like Philip Fisher and Peter Lynch in jail because they went through the hard work of uncovering facts that were available to the inquisitive, but that the general public didn't know about? Phil Fisher (Common Stocks and Uncommon Profits) made his money by really thoroughly investigating the companies he bought into and knowing everything about them. The information he found out -- by interviewing customers, employees, associates, former-employees, and executives -- was not information that was readily available to the public (e.g., newspapers). However, it was available to anyone who went through the hard work of trying to find it out. Hardly a case for crying foul. Had Fisher sold his stocks in the companies he invested in before the shit hit the fan, that shouldn't and wouldn't have been illegal. He had information on probably upcoming setbacks because he kept a very close watch on whatever he invested in. (Fisher, however, didn't do that...he bought stocks and basically held onto them forever).

Insiders are not allowed to trade on information that's not available to the general public. That just wouldn't be fair.

Non-sense. All non-random above-par profits on Wall-Street that beat their respective index' occur because the benefitting person had more knowledge than the market in general, or better knew how to apply that knowledge. Maybe people should question *why* it is that insiders are selling stock before they buy it.

There is no injustice done to those who buy stocks from others who knew those stock-prices would go down. The people who are buying SCO right now would be buying it whether or not the insiders were selling -- they'd just be buying it from other sources. And either way, if the stock goes down, someone is going to lose money. It is unreasonable to ask any intelligent person to hold onto the stock of a company when they know that that company is going down.

Anti insider-trading laws don't do anything to help the public. People would be buying the stocks that plummet anyways. All they do is create a scapegoat to allow people to feel good about their incompetent investments. Individuals should always do research into a companies long-term prospects before buying stock, as well as determine if they think the stock is reasonably priced right now. And they should always invest in a company that they would feel good about holding if they didn't make a profit for 10 years.

Some intelligent articles and paper's on insider-trading:

Insider Trading, Agency Problems, and the Separation of Property and Control

The Regulation of Insider Trading as an Agency Problem

Making Economic Sense

Wanted for Outsider Trading

Communism in Capital Markets

Articles on insider trading from Mises.org

Social Security is a pyramid scam.
[ Parent ]

Yikes (3.00 / 2) (#189)
by virg on Fri Aug 08, 2003 at 01:31:45 PM EST

OK. I read several of your links to get a feel for what you're saying. I didn't need to read very far. The language in those links (and most of what's on Mises.org, by the way) is extremely inflammatory and in several cases, flatly incorrect. One example, from the last link:
The good news for Martha, however, is that by no stretch of the imagination does she, an outsider, owe a duty of trust or confidence to the corporation or its shareholders. She is not an officer or director or employee of the corporation. Martha, you're off the hook. No charge; it's on me.
Is it just me, or should someone who claims to be a lawyer that studies securities law know that a stockholder in a corporation is an owner of that corporation, and therefore is indeed an "insider"? The fact that he thinks she should not be forbidden from screwing the other owners of ImClone by using information given to her by someone responsible for running the corporation, when none of the other owners were given that information, is just short of ridiculous. Whether she really did that is irrelevant to his comment that such behavior is somehow acceptable.

Sorry to sound so inflammatory myself, but anyone who suggests that insider trading laws should be revoked wholesale is a fool. They exist because, despite the fact that they can be misguided or misused, if they didn't exist, the market would be rife with cheaters and spooks (it was, in the 1920's) and that would severly inhibit investor faith in the market mechanism. That would, in its turn, cause a market that either crashes regularly (which is what we had before the SEC) or is useless as an investment tool. The SEC is flawed, and needs revision, but simply pulling them out of the market would be worse than leaving them as they are now. You need to rethink your approach to this.

Virg
"Imagine (it won't be hard) that most people would prefer seeing Carrot Top beaten to death with a bag of walnuts." - Jmzero
[ Parent ]
try reading the article (sorry for repost) (3.50 / 2) (#194)
by dh003i on Fri Aug 08, 2003 at 02:57:01 PM EST

Try reading the entire article. You've selectively quoted one portion of it, and ignored what came after. The author goes on to state that due to the SEC's unconstitutional use of it's unconstitutiona judicial, executive, and legislative powers, "insider trading" has been extended to "outsiders".

Had you read that, you would not be arguing with individuals (like the author of the article you quoted) who certainly know more about law, constitutionaly, and the mechanics of "insider" and "outsider" trading.

If you want to have something intelligent to say on insider/outsider trading, I'd suggest you read the articles in full (particularly the four specific ones I linked to). Insider trading can indeed be a good thing, because it can prevent stock-prices from becoming over-inflated.

The language on Mises.org is not false. It is frank and blunt. If you consider the truth to be "inflammatory", then tough for you. Really, what this amounts to is that you want the government to protect you from losing money on Wall Street, when that responsibility should rest with you. Maybe the language is harsh in some cases. That's because the government's violation of private property rights and of the constitution is insulting to the dignity of free men, and is -- quite frankly -- a definite march towards communism (ever since FDR, the US has been slowly but surely marching towards communism).

If an insider is selling a stock, then you should wonder *why*. In many cases, it may not signal that anything's wrong with the company at all. Texas Instruments had a wave of insider selling stock early on. As a result, the market was paranoid -- something *must* be wrong with TI if insiders are trading. Bzzt! Wrong! Dead wrong. Insiders were selling because they'd made huge profits already on the stock, and wanted to lock in some of those profits, invest elsewhere, diversify, and so-on and so-forth. The general market was too stupid to look beyond the press-releases and do the necessary research to realize that. Phil Fisher, however, wasn't. He knew that the company was solid (because he thoroughly investigated it via 'the business grapevine'), and invested in it very very early on. He's held onto the stock ever-since, which has 10-bagged again and again.

In other cases, insiders will be selling because something is fundamentally wrong with the company. It's really quite irrelevant, because individuals who aren't investing in companies for the long-term are idiots anyways (even in the best-run companies, there are always short-term set-backs). If they are selling because of some short-term set-back, that should be completely irrelevant to the intelligent investor, who should be investing in a company because s/he has done extensive research that indicates that company will generally expand and increase in profitability for many decades to come. If they are selling because the company is fundamentally unsound in the long-run, then the intelligent investor should know that anyways through diligent research.

Martha Stewart has no more obligation to tell those she's selling to that she's selling because she has knowledge of some short-term set-back, than would the investor who researched a company thoroughly and kept tabs on it (e.g., Lynch and Fisher) have obligation to tell the buyer that he's selling because the company is fundamentally unsound and run incompetently.

And what would be the result if Stewart hadn't sold those stocks? The buyer would have *bought* anyways, just from someone else. The stock still would have dipped in the short-run, because Steward buying or selling has nothing to do with the short-term setback. And in this case, the buyer is obviously a moron, because he's whining about one of the inevitable setbacks that happens in business. No-one is entitled to a profit, neither short-term nor long-term. If you want a short-term profit, you have no-one to blame but yourself when one of these inevitable setbacks happens. Stewart disclosing this information wouldn't have changed that, but only accelerated the down-turn in time, and possibly made it worse. The investors were fucked the minute the FDA rejected this drug, whether they knew it or not, whether Stewart sold or not, because eventually that information would work it's way to the market. If you want someone to blame for stock's short-term setback, you can blame the FDA.

Now, any intelligent buyer in this corporation that Stewart sold would be investing because s/he thinks this company is selling at a reasonable price, is run excellently, has integrity in management, and meets all of Fisher's other 15 critiria for a corporation to be a worthwhile investment.

I don't feel sorry for those who whine about short-term setbacks that only could have been avoided by insider knowledge. If you invest in the stock-market for short-term games, you're an idiot anyways, and are taking extreme risks. If, on the other hand, these whiners invested in this company for the long-run, this short-term setback is completely irrelevant.

It is obvious to me that you haven't actually thought about this at all, since you seem to think that somehow, if Stewart had acted differently, the stock-holders wouldn't have experienced this short-term decline in stock-value. (from the whining buyer's perspective),Really what this is about is that you envy her and want to punish her because she didn't lose as much money as you did, even though nothing she could have done would have helped, but only marred.

Social Security is a pyramid scam.
[ Parent ]

LOL (3.00 / 3) (#200)
by SPYvSPY on Fri Aug 08, 2003 at 05:00:08 PM EST

You tossed out the "statists" for that cult of personality? Verbosity is inversely proportional to substance--as a lawyer, and your friend, I implore you to put down the crack pipe and stay off the blogs.
------------------------------------------------

By replying to this or any other comment in this thread, you assign an equal share of all worldwide copyright in such reply to each of the other readers of this site.
[ Parent ]

one-liners lack substance (3.50 / 2) (#202)
by dh003i on Fri Aug 08, 2003 at 05:29:01 PM EST

Short "witty" comments lack meaning and depth. If you have something intelligent to say -- presumeably, a detailed criticism -- then by all means say it. But, your refusal to say anything intelligent only suggests that you have nothing intelligent to say, because you can't find a rational hole in my argument, thus must resort to meaningless one-liners.

Social Security is a pyramid scam.
[ Parent ]

Here's one for you... (3.00 / 1) (#221)
by SPYvSPY on Sat Aug 09, 2003 at 11:55:40 AM EST

...the basic premise of any competitive forum (including markets) is a level playing field. People that use *confidential* information about their own company's futurte dealings have an unfair advantage over people that are not privvy to that confidential information.

I am a contracts lawyer. The last transaction I worked on had a spend of 5.6 billion dollars, and made the front pages of every major newspaper, including the WSJ and the FT. During negotiations, the very fact that the deal might be concluded was *extremely* confidential. If I had purchased stock of either of the two companies involved (or even any of the affected third parties), I would have been trading on knowledge that none of your cult leaders would have been able to glean, even from their "wet work" talking to employees, etc. If any employee would have spoken to you or your cronies, they would have been subjucting themselves to massive (massive!) liability.

So you tell me: how is an investor supposed to understand the motivation behind insider trades during the negotiation period when the underlying transaction is strictly hush-hush? How would an investor know that the deal was motivated by glad-handing executives chatting it up at some fucking country club in Florida? Does buyer beware apply where companies are making moves that are deliberately obfuscated in order to retain employees and foster a sense of surprise and occassion upon its announcement?

These things happen all the time. I know because I live it. I am one of the few people allowed to be in the know because I am one of the lawyers on these deals. I know about certain things today that would make you millions in six months. I'm not bragging-it's a fact.

Sure, if you had the time, and you had the espionage resources of the CIA, you might be able to learn about these things and have a correct understanding of what the motives behind insider trade were. But in reality, it's better for investors to assume the worst because they tend to get burned in these situations, and it's okay for the government to protect investors from companies that are yeilding short-term gains on confidential information.

Why don't you focus your attention on whether it is a breach of an executive's fiduciary duty to make a quick buck off a confidential transaction? That might get you a little further than torturing the Constitution into supporting your cult of caveat emptor.

Next, you're going to be telling us that the federal income tax is unconstitutional.
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[ Parent ]

statist hogwash (2.00 / 1) (#223)
by dh003i on Sat Aug 09, 2003 at 02:49:53 PM EST

...the basic premise of any competitive forum (including markets) is a level playing field. People that use confidential information about their own company's futurte dealings have an unfair advantage over people that are not privvy to that confidential information.

This is bullshit. The playing field is NEVER EVER level, and attempts to make it so are simply a march towards communism. In every transaction, one party will be smarter and more informed than the other. Naturally, those working for a company will have more knowledge of how that company will fare short-term; but since everyone works somewhere, it levels out anyways. This is an advantage that can be obtained by anyone good enough to work in a company worth investing in. Also, superior investors like Lynch, Buffet, Graham, and Fisher have much more knowledge whether or not a company's stock is over-priced, and the fundamentals of the company (thus, it's long-term viability)...should we also put them in jail, because they did the work to uncover these facts? But this is completely irrelevant to insider trading -- if you'd bothered to read any of the articles -- because the person buying was going to buy anyways. Whether or not the insider sold, the "victim" you speak of was going to buy anyways.

If I had purchased stock of either of the two companies involved (or even any of the affected third parties), I would have been trading on knowledge that none of your cult leaders would have been able to glean, even from their "wet work" talking to employees, etc.

More drooling liberal non-sense. So what if you'd bought that stock? Unless there's a clause in your contract with them saying that you can't engage in insider-trading off of your knowledge, then you've done nothing wrong (if there is such a clause, then you violated a contract and can be sued in a civil, not criminal, court). SOMEONE was buying the stock anyways, and people made profit off of that deal by accident, without having any knowledge of it. But, according to you, any profit from "non-public knowledge" is immoral, despite the fact that someone would have made that profit anyways by accident -- just it wouldn't have been you.

So you tell me: how is an investor supposed to understand the motivation behind insider trades during the negotiation period when the underlying transaction is strictly hush-hush?

Not everything is immediately understandable, and the motivation is quite irrelevant to intelligent investors. Either the company is a good long-term investment or it isn't. If it is a good long-term investment, any short-term setbacks or spurts due to setbacks and deals is completely irrelevant. If investors are trying to make money in the short-term, tough for them. Financial advisors back to Ben Graham (The Intelligent Investor, Security Analysis) and Phil Fisher (Common Stocks and Uncommon Profits), and up to Warren Buffet and Peter Lynch have been telling people that you should not invest in the stock-market trying to make a short-term profit. Buffet has said that you should make such sound investments that if you don't make a profit for 10 years, you'd still be happy, because you know the company was selling at a reasonable price and was fundamentally sound. To those who ignore this advice -- and thus, may suffer from short-term set-backs -- tough shit.

I know about certain things today that would make you millions in six months. I'm not bragging-it's a fact.

So what? Some people are going to become millionares, accidentally, because they just happened to invest at the right time in the right place. According to you, this is somehow much better than if those who actually have the appropriate knowledge invest based off of that knowledge (and thus, money is redistributed from those who make incompetent investments to those who make competent investments).

it's better for investors to assume the worst because they tend to get burned in these situations, and it's okay for the government to protect investors from companies that are yeilding short-term gains on confidential information.

Part of that is right. It is best for investors to assume the worst. Which is why they should be investing for the long-term, in companies selling at reasonable prices, with excellent management, and ignore the volatile fluctuations of the gyrating market and various set-backs. It is not ok for the government to protect investors. By offering a safety net for incompetent investors, the government encourages and subsidizes incompetent investors.

Why don't you focus your attention on whether it is a breach of an executive's fiduciary duty to make a quick buck off a confidential transaction?

This is up to the shareholders (investors) to decide, not you, not the government. If investors don't want this kind of thing going on, they should invest in companies which don't allow insider trading and have harsh penalties for it, such as losing one's job and being sued; or invest in companies which don't allow any within the company to own stock. Investors of a company that does allow this kind of behaviour can, if they desire, prohibit it. You seem to forget that investors -- not management or employees -- are the owners of a company. As owners of that company, they ultimately decide internal policiees, either directly by voting, or indirectly by firing management.

So, again, we arrive at the conclusion that it is all up to individual investors. They can investigate the companies. They can investigate if the stocks are selling at reasonable prices, and if the companies are long-term winners. They can determine if management is trustworthy (indeed, you should never invest in a company where there is a serious question about the trustworthiness of management). They can choose whether or not to invest in companies that allow insider-trading, whether or not to invest in companies that allow insiders to hold stock. And if they are hurt by short-term setbacks that insiders could have benefitted from, it's because they were incompetent and trying to make a short-term profit off of the stock market.

And, of course, you have yet to show who exactly is harmed by insider-trading. That's because no-one is harmed at all. People still would have bought and sold the stock, some would have lost, some would have won. The only difference is that investor A sells to ignorant investor B, instead of aware investor C; or vica-versa. If corporate officers engage in trading in violation of their contracts, then they can and should be fired and sued, but that's a civil -- not criminal -- matter. And what really hurts investors is incompetent management, which it is entirely in their power to replace; or re-allocate their investments ot superior companies. The short-term set-backs that make insider-trading possibly profitable are completely unavoidable in regular business, so investors would be hurt by those anyways.

And then there's the problem with the SEC being an unconstitutional violation of the separation of powers, since it combines legislative, executive, and judicial powers. But, putting that aside, our legal code on insider trading is a vague mess, which is precisely what the govenment wants, so they can exert the most draconian control over individuals. Also, according to your twisted logic, we should also imprison those who work for great companies, and -- due to their insider knowledge of how excellent the company is -- invest in those companies; or vica versa for those who work for poor companies and don't invest in them (e.g., Enron). And, then, of course, most who've been consistently successful by investing have done it by finding out facts that aren't readily publicly available, by interviewing employees, customers, executives, former employees, and otherwise using the business grapevine. Peter Lynch and Philip Fisher should also be in jail, according to your logic.

Come back when you actually have something other than this tired worn out tripe to say. You're comments reflect the "feel-good" liberal/communist policy, which provides the public with a fine object for wrath, but does not in any way benefit anyone, but in fact harms people.

Social Security is a pyramid scam.
[ Parent ]

Haha... (3.00 / 1) (#225)
by SPYvSPY on Sat Aug 09, 2003 at 08:01:47 PM EST

...good thing you're just a crackpot on the sidelines and not setting any agenda or doing any other work that matters! Otherwise, we'd all be *fucked* with a capital 'F'!

If you can't understand what harm comes from trading your own company's stock based on significant events the timing and existence of which your company withholds from the public and directly controls, then there is no hope for you.

As I said before, the paucity of the substance of your comments is evidenced by your extreme wordiness. One thing's for sure: I'll have to recalibrate my scale for cretinism after encountering you and your cult.
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[ Parent ]

Aha! (none / 0) (#226)
by SPYvSPY on Sat Aug 09, 2003 at 08:07:00 PM EST

I got your number. You're just another jackass spewing on about the latest book you've read. May I suggest that you try browsing the self-help section next time, or perhaps some Plato (esp. the part about sophists).
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[ Parent ]

idiot (3.00 / 1) (#227)
by dh003i on Sat Aug 09, 2003 at 08:30:42 PM EST

Normally, I don't say this, but you are an idiot. I have demonstrated how insider trading does not in any way harm stock-holders. What harms stock-holders is incompetent management. Furthermore, it is entirely within the power of stockholders -- as the owners of the company -- to ban insider-trading by contract, and harshly punish it; or to ban anyone who works for a company from having stocks in it, by contract. It is also within the power of investors to choose to invest only in companies which don't allow insider-trading, if they so desire, and to only invest in companies where the trustworthiness of the management is unquestioned (Berkshire Hathaway would be an example).

Since you have yet to in any convincing way show precisely how insider-trading harms stock-holders, one can only conclude that you cannot show that because you have no convincing argument. Even if you had an argument as to how insider-trading may harm investors, it would not justify government intervention, because individual investors could deal with the matter itself. If insider-trading really is harmful to investors, the the free market would place sufficient pressure on corporations to disallow it or disallow any insiders from owning stock, by contract.

Your fallicious attacks on me don't change the validity of my argument, nor the invalidity of yours. The free market works just fine on it's own, without any government tampering to prevent "unfair trades", or to subsidize, tarrif, or tax. The only role of the government -- if any -- is to protect the property rights upon which the free market depends.

P.S.: Plato was a philosopher, not an economist. And his philosophy, at that, is hardly unquestionable. There is no certainty in philosophy. Judging economic analysis and investment advice, however, is more objective. The history of economics has shown us that Keynesian economics, which you seem to support, is hogwash (Keynes, although a worthy investor, was a poor economist...his theories of economics have been shattered and outrightly contradicted by facts, such as inflationary recessions). If you want to understand the economics of the free market, the Austrian school of economics is a good place to start. Regarding investment, the whining of individuals who claim to have been harmed by insider-trading (despite the fact that they would have bought/sold anyways) only comes from individuals who are failures as investors. Good investment advice can be obtained from those who have proven themselves to be excellent life-long investors, such as Graham, Fisher, Lynch, Buffet, T. Rowe Price, Bernard, etc.

Social Security is a pyramid scam.
[ Parent ]

Keeping it simple for you... (5.00 / 1) (#228)
by SPYvSPY on Sat Aug 09, 2003 at 11:32:16 PM EST

I have demonstrated how insider trading does not in any way harm stock-holders.

Insider trading does harm shareholders. If you are a senior manager at a pharma, and you know that a drug is not going to be approved by the FDA, and you sell your shares five days before the public announcement, you've bet against your company and personally profited from its misfortune. As an executive, your number one priority is to maximize *shareholder* value -- not your personal savings account. Please explain to me how such a sale is consistent with fiduciary obligations.

It goes the other way, too. If you know of a major success in your company's future (e.g., a powerful joint venture, acquisition, merger or sourcing relationship), and you buy up shares prior to the announcement, you've put your short-term profit into a potential conflict with your company's long-term strategic interests. If, for instance, that exciting announcement turns out to be a very bad deal at the last moment, your personal interest in realizing the gains on that stock purchase will be in direct conflict with what's best for your company. In that case, it would have been better to let the deal die quietly, which you would readily have done, if not for your major personal investment in the appearance of a successful announcement. Of course, you will be out of those shares before the truth about the deal's failure is revealed, and you will be a big winner--at the expense of the company and its shareholders.

Investors are consumers, my friend, and like consumers of off-the-shelf goods, they require protection because government is the vehicle by which consumers leverage en masse. You are the beneficiary of many consumer protection laws, including the fiduciary duty and the rules restricting insider trading. As a person that represents consumers with billions of dollars to spend, I can tell you first hand that even the biggest customers have to fight hard to get a fair deal. Individual consumers (and individual investors) cannot be expected to negotiate at arm's length with their target investments. To expect otherwise is more absurd than asking Microsoft to alter its license terms for your personal copy of XP.

If the markets operated as per your whim (or should I say the whims of the people whose ideas you assimilate and regurgitate as your own?), investors would have two choices: consolidate buying power and bargaining leverage, or stay out of the markets. Does that sound practical to you? How healthy would that market be? Do you think investors would be encouraged to participate? This is what is so fucking idiotic about your premise: your approach kills participation. A market populated by nothing but Berkshire Hathaway-like bargaining pools would be as dried-up as your wife's uterus.

Re: Plato. The reference was to Plato's critique of sophistry, which you are too dull to understand. You are obviously an academic personality, given to hanging ideas on names and vice versa. Like Plato, I deal in reason, not schools of thought.
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[ Parent ]

god, you're stupid (3.00 / 1) (#230)
by dh003i on Sun Aug 10, 2003 at 12:20:22 PM EST

you know that a drug is not going to be approved by the FDA, and you sell your shares five days before the public announcement, you've bet against your company and personally profited from its misfortune. As an executive, your number one priority is to maximize *shareholder* value -- not your personal savings account. Please explain to me how such a sale is consistent with fiduciary obligations.

Such a sale is completely irrelevant to fiduciary obligations. The drug was not going to be approved anyways, and the stock was going to experience a short-term drop whether you sold or not. There is nothing inconsistent with this and maximizing shareholder value. It is in the long-term interest of any executive to help the company do as well as it can. You have yet to demonstrate how this action actually harms share-holders, preicsely because you can't demonstrate that. You just want someone to be the subject of scorn. Save your scorn for the FDA.

If you know of a major success in your company's future...you buy up shares prior to the announcement, you've put your short-term profit into a potential conflict with your company's long-term strategic interests. If...that exciting announcement turns out to be a very bad deal at the last moment, your personal interest in realizing the gains on that stock purchase will be in direct conflict with what's best for your company.

Wrong. If the deal is a very bad deal, then it will be in your long-term best interest to prevent it from going through. A minor short-term gain in stock-value of a couple of percent, even 10-20%, is completely irrelevant in face of the loss of significant long-term increase in value.

Investors are consumers, my friend, and like consumers of off-the-shelf goods, they require protection because government is the vehicle by which consumers leverage en masse.

More communist crap. While justifying this nations continual march towards communism (for that's what all state-intervention in the free-market is), you have thrown logic completely out the window. Consumers do not require government regulations, nor do stock-holders. In fact, government regulations harm stock-holders and consumers.

First, you clearly don't understand the free market. The idea that stock-holders are consumers is wrong, since it distorts the true relationship. Consumers are the customers of companies. Companies are run by management, which appoints employees. Stock-holders exercise control over management, by removing poor managmenet, and replacing it with superior management. Thus, consumers are ultimately the customers of stock-holders, the property-owners of companies.

The hierarchy goes like this. Employees work to satisfy the company's daily needs and to satisfy consumers. Their boss', management, fire them if they don't do their job well enough. The stock-holders are the boss' of management, who will fire them if they don't do their job well enough. Consumers, of course, are the ultimate boss, because their actions determine which companies are successes or failures; companies which fail to satisfy consumers must either change their business model, or go bankrupt. That's the way it works in an unhampered free market.

In the current situation -- where the goverment destructively intervenes in the natural market process -- things are distorted. Because of government regulations, share-holders cannot exercise sufficient control over management. Restrictions on financial institutions, anti-takeover restrictions, and labor legislation all act to weaken the control shareholders can exert over managers. All of them make managers more accountable to the government, than to stock-holders. Thus, management is also more accountable to the government than to consumers (as shareholders are accountable to consumers, in terms of the value of their stock). All of these regulations weaken the natural property-rights of share-holders. Because management does not have to take the possibility of takeover as seriously, they do not have to take their obligation to manage the company in an efficient way as seriously.

Now that you're misconceptions have been cleared up, it is clear that stock-holders are not consumers in any sense of the word. They are property-owners (specifically, partial owners of corporations), who under an unhampered free-market can exert control over their property (and remove managers who do not manage efficiently). They can also discriminate which companies to invest in. Both of these powers that investors have will, in the free market, place pressure on management to perform their jobs efficiently.

The scenario you point out where a CEO may act contrary to the best interest of his company is flawed for two reasons. First, it assumes that he CEO is short-sighted, and would pass up a significant long-term opportunity for increased valuation of his stock, for an insignificant short-term increase in valuation. Second, such CEO's who do act contrary to the best interest of their shareholders by allowing a deal to go through that -- though it appears good in the short term thus increases short-term stock price -- will be harmful in the long term...such CEO's will be removed by stock-holders. They will also have poor reputations, which will be bad for their long-term interest. Another natural market-check. There are natural market checks on this kind of behavior. That is, in an unhampered free market.

The real harm to investors comes -- not from insider trading -- but from poor management, which is supported by government regulations.

If the markets operated as per your whim (or should I say the whims of the people whose ideas you assimilate and regurgitate as your own?), investors would have two choices: consolidate buying power and bargaining leverage, or stay out of the markets

First, stop lying. I never claimed these ideas were my own. I clearly linked to the original authors of such ideas. Either you are too stupid to have seen that, or your are intellectually dishonest. Furthermore, your ideas are hardly original either, not that you're claiming they are. They are the ideas of socialists and communists around the world.

Second, your ultimatum scenario is incorrect. Investors leverage their power by the very act of investment. Companies with good financial practices, which act in accordance with the best interest of their shareholders, will be invested in, and stock price will go up. Furthermore, once one is a stock-holder (in an unhampered free market) one is part of a collective of other property-owners, who collectively exert their will.

Contrary to your high self-opinion, there is no logic in your reasoning. There is only sensationalism, emotionalism, and short-sightedness. It is ironic that the very same government regulation which hampers the share-holder's power to remove poor management (exert control over his property), to justify yet more government intervention, at the expense of the investor. Clearly a product of the brainwashing you've received from elementary school to high-school, college, and (presumably) law-school.

Government interventionism has never helped, only harmed. It has been shown that government interventionism is what has worsened the depressions of history, for example. It has, in fact, caused the depressions of history, by mandating inflation, creating centralized banks, and what-not (inflation, and subsequent government intervention to prevent market reaction to mal-investments, is what has caused depressiosn). Another unfortunate consequence of the interventionism supported by socialists like yourself is that, as pointed out by Padilla, is that"Contrary to the market economy wheree each actors tries to satisfy the interest of other people in order to better satisfy his own interest, under interventionism each actor tries to satisfy his own itnerest to the detriment of others."

To clear up your completely backwards thinking on insider trading, I suggest you read, Insider Trading, Agency Problems, and the Separation of Property and Control.

Summary: The market works just fine on it's own, without any government intervention, regulation, taxation, tarrifs (mercantilism), and so-on and so-forth. The only appropriate role of government is to protect the property rights upon which the free market is based, and to protect other essential rights (such as to life).

Social Security is a pyramid scam.
[ Parent ]

Loud, Obnoxious, and Wrong Again... (5.00 / 1) (#234)
by SPYvSPY on Sun Aug 10, 2003 at 05:57:59 PM EST

The executive that profited from the failure of his company's product line in my example above is in violation of his fiduciary duty because he has created a personal interest in seeing the stock price drop, and that personal interest is in direct conflict with his professional duty to maximize the value for other shareholders.

The government enforces a simple mechanism to protect companies from these sorts of internal conflicts of interest because, at the end of the day, it encourages participation in the market. As I said above, if you let conflicts of interest run unchecked, consumers/investors will not contribute and the markets will grind to a halt.

Fortunately for all of us, my case is proven on a daily basis, since the United States remains the strongest economy in the world. As a matter of fact, the system of regulation that exists today in the United States is a direct result of the failure of the school of thought that you espouse. Abuses of foreknowledge of confidential events compromise investor confidence, discourage participation, and take money out of the markets. If it were any other way, no one would have bothered to dream these rules up and waste the time and effort to enforce them.

I am the perfect example: if I were allowed to play by your rules, I would be much richer than I am. But I am not allowed to play by your rules, because your rules are not rules at all, but rather a fantasy devised by alchemists in an ivory tower whose primary interest is in selling investment advice to two-bit crackpots like you.

By the way, what's your net worth? You must be quite bitter about all those dollars you've been deprived of by our government. Say, why don't you move to a jurisdiction with a totally free market? Oh, right, because there aren't any. I wonder why that is?! LOL.

And let me reiterate again, intelligence is inversely proportional to verbosity. That makes you a cretin. The laxity of your grasp on the ideas you espouse is evidenced by your failure in making a compendious point. Like all sophists, you speak for the sake of hearing your own voice.
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[ Parent ]

Addendum (4.00 / 1) (#235)
by SPYvSPY on Sun Aug 10, 2003 at 06:08:38 PM EST

One point that bears clearing up:

In your fantasy of a "free" market, there is no check on conniving CEOs at all. What will an individual shareholder do if it is unhappy with the performance of the CEO? Vote in favor of a sale to another company? Vote for removal of the executive? Divest? None of these are viable options where the executives have robbed the company of its capital and left it a shell of its proper, healthy self. That is the result of insider trading. If executives are permitted to take short-term gains from the coffers of their own companies, why would another company want to buy them out? What good does firing the CEO do? Does it get the money back? What good does divesting do when the share price is below single digits?

So, tell me, what is the check against executives robbing the value of their companies for personal gain in the "free" market?
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[ Parent ]

RTFM! (none / 0) (#237)
by dh003i on Sun Aug 10, 2003 at 09:43:22 PM EST

Well, I just typed up a summary of Insider trading, agency problems, and the separation of property and control. However, I accidentally hit the back button, thus completely wiped out my summary. Since I don't feel like doing it again, I won't. If you simply read the paper I cited all of your absurd misconceptions will be cleared up. If you're too lazy to even do that, then there is no point in debating with you, since you are obviously set in your propagandized views.

Social Security is a pyramid scam.
[ Parent ]

Why don't you... (5.00 / 2) (#238)
by SPYvSPY on Sun Aug 10, 2003 at 10:01:11 PM EST

...respond to my comment instead of invoking your mentors by proxy? If you understood the subject matter, you would be able to argue it yourself. The fact that you lost your summary (which is very amusing, since you are so exceedingly over-long in your comments anyway) is beside the point. I sense that your will to defend your crackpot theory of the month is weakening. Don't worry: I will be here when you fall, looking over the stillborn corpse of yet another ivory tower academic, impaled by his own sword, having tripped up on the uneven ground of reality.
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[ Parent ]

I don't know or care what you're arguing about (none / 0) (#240)
by it certainly is on Sun Aug 10, 2003 at 11:17:45 PM EST

but that's a beautiful turn of phrase you have there. Bravo!

kur0shin.org -- it certainly is

Godwin's law [...] is impossible to violate except with an infinitely long thread that doesn't mention nazis.
[ Parent ]

why don't you RTFM? (none / 0) (#241)
by dh003i on Sun Aug 10, 2003 at 11:25:02 PM EST

Is it really that difficult for you to read a fucking paper? I realize there might be some big words in there -- you might actually have to use a dictionary. And you might actually have to think, rather than just accepting the propaganda you've been brainwashed to believe. It's obvious that the reason you don't want to read it is because you probably know you wouldn't be able to refute it. Until I thought about the issue in more depth, I had the same brainwashed short-sighted position you had. And typical of a fucking communist, you want other people to do your work for you. Rather than reading the article yourself, you want me to summarize it for you: intelletual socialism. But, fine.

As a premise, it is necessary to know that contract law can effectively deter all of these kinds of bad behaviour, by sanctioning incompetent or malicious insider managers.

The following checks on insider maliciousness or incompetence work in an unhampered free market, and are smashed by the communist interventionism you support. The communist interventionism which destroys natural free market checks takes 3 significant forms: (1) Legal restrictions on financial institutions, preventing them from acquiring large portions of stock, thus causing difuse ownership, lacking any central girth and leadership; (2) Anti-trust regulation and anti-takeover regulations, which prevent takeovers (anti-trust) or require that those attempting a takeover report to the SEC when they've acquired 5%, and prevent them from taking measures to ease takeovers; (3) Labor legislation, which prevents shareholders from firing inferior management. Absent these communist interventions (which you almost certainly support), the following free-market forces check insider incompetence and maliciousness:

1. Reputation, blacklist, and boycott. As insider managers act incompetently or maliciously, they develop bad reputation. They are thus placed on blacklists, and boycotted by any intelligent investors (who won't allow them in their companies, or won't invest in companies run by them). Those who don't boycott them deserve what they get.

2. The market for corporate control. The incompetence or maliciousness of managers can be disciplined by mergers, proxy fights, direct purchase of shares, and other take-over devices. On the unhampered free market, this corporate takeover possibility gives shareholders power and protection against mismanagement, as managers have to worry about take-overs.

3. Internal managerial competition. Within corporation, monitoring goes on from the top down, the bottom up, and among peers. High-level managers are reflected on by their subordinates, and will be fired if they don't remove incompetent or malicious subordinates. Thus, they monitor for incompetence and intentionally malicious behaviour (against the interest of the company). Likewise, their underlines monitor them for incompetence and maliciousness, hoping to over-step them. Peers also monitor, so as to bolster their own case for promotion, and diminish that of their competition. Thus, within a company, there are extreme pressures placed on all parties to act in the best interest of the corporation. In an unhampered free market, the malicious and incompetent will be discovered by their superior, peers, and subordinates, and readily fired.

4. External managerial competition. In the unhampered free market, incompetent or malicious managers will be replaced by outsiders.

5. Competition in the product market. Competition from other firms creates incentive for insider managers to do their best. If consumers are not satisfied, they will not patronize the company, and the insider managers will be sanctioned for their failure (whether it was by maliciousness or incompetence).

Summary: You're position is based on fallicious reasoning, particularly circular reasoning. You use the very interventionist policies which you support -- and which reduce shareholder power over their property -- to justify ill-advised insider-trading laws. It should also be noted that insider-trading laws don't discourage insider-trading, nor provide the kind of deterrent that the unhampered free market could provide.

Social Security is a pyramid scam.
[ Parent ]

Don't talk to me about contract law... (5.00 / 1) (#242)
by SPYvSPY on Mon Aug 11, 2003 at 12:56:35 AM EST

...I live it and breath it. It's obvious that you have no practical experience in business contracts. Investors have less leverage than consumers, who have next to none. Don't talk to me about contract law. If you really insist on doing so, please tell me how an investor would ever negotiate favorable terms with executive management. Even Warren Buffet can't command favorable terms with his investments -- he only votes with his dollar. What make you different? I'm genuinely curious how you think investors would muster the leverage.
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[ Parent ]

no-one cares (2.00 / 1) (#245)
by dh003i on Mon Aug 11, 2003 at 10:55:58 AM EST

No-one cares about what you say your profession is, particularly since it isn't verifiable in any convincing way.

I've clearly laid out how consumers and investors have complete and total control over corporations, in an unhampered free market. Consumers vote with their wallet. Period. Maybe an individual consumer doesn't have much leverage, but what the fuck do you think is differentiating the successful business' from the failures? How many consumers they get. It's rather like the elections for politicians, except in the free market, we vote every day.

One individual can't negotiate anything. However, they exert their influence by discriminating between corporations. If corporations treat their customers poorly, they will lose them and go out of business, unless they adapt. It's really that simple. The free market operates much like evolution, except there's a choice in the matter: companies can choose whether to conduct business so as to bring in more customers, or choose to go out of business (or be relegated to insignificance).

As for stock-holders, as I clearly stated above -- in 5 concise simple points -- that in an unhampered free market, they can and do exercise their property rights. They have the power to remove incomopetent or malicious management. They may defer the every-day decision-making aspects of that power to a board of directors (which may be made up of the largest shareholders), but ultimately they decide. There are strong and significant pressures placed on managers to do their best (which I noted above), and if they don't, in an unhampered free market, they will be removed. Even if not, there's also the fact that competition will diminish companies run by incompetent or unethical managers in market-size, thus take care of the problem by reducing the amount of capital in poor investments.

Again, you are using circular reasoning to justify your backwards positions. The reason why shareholders can't exercise absolute power over their property (by firing managers, voting on various contract-arrangements, etc), and why consumers can't exercise absolute control over corporations of a whole (by selecting the best corporations) is because of government interventionism. So, your arguments that they don't have control are entirely circular and fallicious (since *you* created that situation). To give shareholders back control, you need to allow financial institutions to take up larger positions in stock (to provide some centralization and leadership to the ownership of corporations), eliminate backwards laws on when you can/can't fire employees, and eliminate anti-trust and anti-takeover laws.

Even under the current communistic interventionist policies, it is possible for shareholders to exercise various powers. They can choose not to invest in companies which have strict rules on insider-trading and severe punishments, or those which don't allow insider-trading at all. They can choose to invest in companies where the management has a long track-record of competence and integrity. If they invest in companies with-out such assurances -- without rules against insider trading and a long history of integrity -- then they accept the associated risks, and have nothing to complain about.

Of course, if you had actually bothered to read the paper I referenced, then you would know that all of your current arguments are false and fallicious. I suggest that before you go about spouting opinions completely ignorant and oblivious to economics, you try to get some elementary grasp of the economics of the situation. Your thoughts are nothing more than "feel-good economic policy", designed to "protect people", despite the fact that it in fact harms them. Typical of liberals.

Social Security is a pyramid scam.
[ Parent ]

You are so niave... (5.00 / 1) (#246)
by SPYvSPY on Mon Aug 11, 2003 at 12:33:21 PM EST

...it's painful. Voting with your wallet? Representation by proxy in the boardroom? These are not realistic mechanisms for representing the individual investor's interests. How can an individual investor vote with his wallet if he isn't privvy to the confidential information that is shared only with top executives and boardmembers? Boardmembers are about as effective at representing their constituencies as congressmen are (if not worse)--and we all know how that story ends.

The good news is that there *is* a mechanism for consolidating investor leverage! It's the same one we use to consolidate consumer leverage. It's called *the government*. The government represents the interests of lots of little people en masse. And the really good news is that protecting the interests of individual investors is a *good thing for the market* because it fosters small investors' confidence and encourages participation. What's so hard to understand about that?
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[ Parent ]

the government never solves anything (2.00 / 1) (#247)
by dh003i on Mon Aug 11, 2003 at 06:16:02 PM EST

I'll repeat myself, because you are obviously too stupid to understand this the first time around. Government interventionism never helps matters. It either favors certain parties at the expense of others, distorting natural market forces, or harms everyone all around.

Boardmembers are about as effective at representing their constituencies as congressmen are...The government represents the interests of lots of little people en masse

So, which is it, wise-guy? Can the government represent it's consituents or can't it? You can't on the one hand say that congressmen aren't effective at representing their constituencies and then only a paragraph later say that the government represents the interests of little people. Of course, the answer is, that the government does not in any way represent the best interests of its people. Politicians engage in harmful interventionist policies so they can say "they're doing something to combat blah blah blah". These policies are of course harmful. There is no natural incentive for the government not to engage in these harmful policies, since it is not in any way harmed by them. The government -- being perpetually funded by stealing our money at gunpoint -- has no incentive to be productive with it. Boardmembers, on the other hand, are usually large stock-holders themselves; thus, their interests are usually naturally aligned with the investors they represent.

The only one here who's naive is you, thinking that the government adequately protects individuals from the "big bad managers". Typical communist crap. Of course, individuals need protection from the government more than they need protection from companies. The only legitimate role of government in the free market is to enforce property rights, and enforce contract-law (which is an exentsion of property rights).

I have shown not one, but *5* specific mechanisms whereby the unhampered free market places checks both on managerial incompetence and maliciousness, all of which reinforce eachother. You have selectively chosen to ignore several of the arguments, and you distort the rest with sensationalism.

Shareholders -- and consumers -- can vote with their wallet because eventually maliciousness and incompetence is going to be discovered. They can vote with their wallets by considering the reputation for competence and integrity of the executives at companies they invest in. When incompetence or maliciousness is uncovered, they can cast their vote to eliminate it. In most cases, the board will eliminate incompetent or malicious managers, and if it doesn't, the shareholders -- who ultimately decide who's on the board -- will eliminate them.

And of course there's the fierce competition from within corporations. Every executive wants to find a reason why every other executive shouldn't be promoted, but he should. Incompetence and maliciousness certainly qualify as good reasons. Every high-level executive wants to eliminate subordinates who are incompetent or malicious, because he is only as good as they are. Every low-level executive wants to find some deficiency -- be it incompetence or maliciousness -- in his superior, so he can remove his superior from his way. (by "wants", I don't necessarily mean that everyone's hoping that everyone else around them is crooked and incompetent, just that they will expose those who are, for their own benefit and to make themselves feel better).

Also, as I have shown, government interference *does not* protect the interests of small investors, or anyone else. It only harms them, by eliminating their power to remove incompetent or malicious management (anti-trust/merger regulations, regulations on firing employees, and regulations against financial institutiosn owning large positions, all reduce the ability of the property-owner to exert control over his or her property). Of course, those regulations are separate from insider-trading, and could be eliminated, while still keeping insider-trading regulations. But insider-trading regulations are bad in and of themselves as well. They merely encourage managers who would engage in malicious behaviour to find other ways of insider-trading, side-stepping the regulations. Also, there is nothing inherently wrong with insider trading -- someone was going to make a loss/profit anyways. What is wrong is incompetence and maliciousness in management, which does not necessarily go along with insider trading. Government interventionism has solved nothing, and only created new worse problems, as is always the case when the government intervenes. Of course, being a lawyer, you are trained to think that the good-old government is the answer for everything, that for every problem you nutcase liberals dream up, the government's the answer; of course, that's not the case, and you nutcases normally fabricate these so-called 'problems'.

As I've said a trillion times, no-one has to invest in companies that allow insider trading. No-one even has to invest in companies that allow insiders to own stock at all. The market will naturally adapt to investor's concerns about insider-trading. Let's say that for some absurd reason, nutcases like yourself are paranoid about insider-trading, and won't invest in any company that allows corporate officials to own stock. If there are enough of you, then a portion of the market will adapt to that concern. Of course, why one would want to deprive insiders of a natural benefit of being an insider (having inside-information and being able to trade on it) is beyond me; it seems natural to me that market forces would drive workers to work in companies where they are allowed to hold stock and engage in insider-trading.

Typical of interventionists, your proposed solutions to this 'problem' you've fabricated are short-sighted, ill-advised, and ultimately extremely harmful to everyone around. Investors' natural right to control their property is lessened. There's less incentive for employees to work at these corporations, since the inside information they have is useless to them, as they can't use it.

Social Security is a pyramid scam.
[ Parent ]

Short answer... (4.50 / 2) (#248)
by SPYvSPY on Mon Aug 11, 2003 at 06:48:31 PM EST

A good measure of your lack of sophistication is your eagerness to equate the Congress to government writ large. The government includes specialists who are quite skilled at fueling the fires of a healthy market--certainly more skilled than you and others who would throw their hands up and collapse under the weight of actually identifying unhealthy conflicts of interest and resolving them. All the Congress need do is authorize those specialists to regulate some aspect of the market at some time in relevant history--the rest of the day-to-day work is handled by people that actually know what they are doing.

When I analogized congresspeople to boardmembers, my point was that boardmembers are, in most cases, very far removed from the actual interests of their constituents. I did not mean to suggest (as you wrongly attribute to me) that Congress (or a board of directors) is incapable of getting anything right from time to time. In fact, when problems are as serious as the problems associated with insider trading, they get heard by Congress, and Congress acts on them.

So, the fact that Congress saw fit to address the scourge of insider trading only further illustrates how seriously damaging to the market insider trading actually is. It is one of those "big ticket" items that gets the attention of the lawmakers, because without regulation in that area, the markets are (here we go again) starved for participation.

In your future posts, I would suggest that you stick to regurgitating the claptrap to which you incessantly cite, as any "coloring outside the lines" by you seems to result in your misrepresenting my statements and attributing meaning to my words that was never there.

Now, I want you to go about the business of answering my original question to you: How is insider trading not a fundamental conflict of interest between an executive's personal self-interest and his fiduciary duty to other shareholders?

Then when you are finished failing to answer that question, you can move on to the more interesting question of how most forms of insider trading is not violative of contractual confidentiality restrictions and trade secrets protections.
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[ Parent ]

in other words, your backpeddling (2.00 / 1) (#250)
by dh003i on Mon Aug 11, 2003 at 11:21:44 PM EST

No one area of government is much more efficient than any other. They are all equally crap, precisely because there is no natural motivation (as in the free market profit/loss system) for them to operate efficiently. Your attempt to explain away your obvious conflicting statements is pathetic. From Congress, all other government action ultimately arises (in theory). If they aren't looking out for he best interest of their constituencies, nothing they create will be.

Your own examples only demonstrate how Congress is harmful. Sound economic analysis tells us that government interventionism in the free market has always produced harmful effects. The government single-handedly prolonged the great depression by it's tampering, for example.

How is insider trading not a fundamental conflict of interest between an executive's personal self-interest and his fiduciary duty to other shareholders?

There is no conflict of interest. Insider trading has no effect what-so-ever on an insider's performance, or the performance of the stock. As I pointed out before, someone's going to lose and gain anyways. The only time there's a problem is where managers with enough influence start doing things that are bad for business because they want to create unusual opportunities for self-profit.

Because you are obviously stupid, I'll explain this with an example (related to the Martha Stewart example):

Let's say that the CEO of a biotech company realizes before anyone else that the FDA is going to reject their drug. Thus, anticipating a loss in the near future, he sells his stocks. A week later, the stock drops (a correction). There is nothing wrong with this and no inherent conflicts of interest. Such little hiccups (something not working out) are a regular part of business and are unavoidable.

Let's take another example. Same scenario, except the CEO does something to to make the FDA reject the drug on purpose. He then shorts the stock, sells his shares, reaps a profit from the short, and re-buys when the stock drops. In this case, he has clearly violated his duty to the company. However, the violation has nothing to do with his stock-maneuvers, but everything to do with his malicious failure as a CEO.

There is no inherent conflict of interest because it's in the long-term best interest of the CEO to do his best for the company, especially if he's a stock-holder, irrelevant of whether he uses inside information when trading or not. Also, it's up to the board and shareholders, who ultimately have sbolute property rights over the corporation, *not* the govenrment, to decide what CEO's can and can't do. Punishments for violations of policy can be laid out in contracts, and if a CEO acts against the best interest of the corporation to short the stock and buy at a low-point, then he can be taken to court and sued for the company's losses, due to his maliciousness. The company won't recover their losses, but he will be bankrupted -- plenty of incentive not to do such**.

Of course, this example is nuts, because said CEO stands to gain a lot more in the long-run if the drug is accepted by the FDA. Furthermore, by engaging in such malicious behaviour, he risks his own future with the company should his actions be found out, and his entire future career. His subordinate CEO's would not pass up the opportunity to report him, so they can advance, nor would the board hesitate to fire him. At which point, his reputation tanks, he is placed on blacklists, and then boycotted. At that point, his career is over.

how most forms of insider trading is not violative of contractual confidentiality restrictions and trade secrets protections

Typical of a lawyer, you have loaded the question and thus made answering it impossible. Contracts will differ, the so will the terms for confidentiality and trade-secrets protections. Also, "insider-trading" necessarily means that no confidentiality is breeched, since the insider merely acted on his knowledge, and did not tell anyone why he did so.

It's only in outsider trading, where one tells a family member or friend, that confidentiality can be breached. Even in that case, confidentiality need not be breached. If a CEO says, "sell, because XYZ", then confidentiality has been breached. If he just says, "Sell, trust me on this", then confidentiality has not been breached. Of course, this assumes a certain kind of contract. And it's up to the shareholders to decide what contracts are required (represented through their board of directors). Once both parties agree to the contract, the 5 natural free-market forces I mentioned above pressure CEO's to abide by their contracts.

Of course, there's also the natural fact that as the *owners* of a corporation, there's a reasonable case to be made that stock-holders have the right to know all information about that corporation. Of course, typical of a lawyer, you want to seem to deny this natural right.

Consider the following case:

A company is owned by one person. He, however, does not manage it. That's delegated to managers. However, just because he doesn't run it, doesn't mean that he doesn't have the right to know everything going on within it, and step on his property at any time.

The same holds for when there are 10 equal owners instead of just one. They all have the right to know everything going on, and to step on their property at any time.

There is no sound logical reason why the same shouldn't apply when there are 10,000 owners instead of just one or 10.

Back to "conflict of interest..." and "violation of contractual...", even if you hold that such can be a problem, it's the place of shareholders and the board to decide upon the contractual terms and sanctions, not the government. If CEO's violate those contractual terms, then they can and will be punished (malicious CEO's will be exposed quickly by market forces, and punished even quicker). It is not the government's place to effectively force certain contractual terms on companies (e.g., no insider-trading), which they might not have wanted. That's interventionalism, and is harmful.

And, unless you want to create criminal penalties for violating all contracts, you probably shouldn't criminally punish CEO's who violate their contracts.***

Summary: your claimed knowledge of law is completely irrelevant in the fact of economic forces. Law does not justify policy which is economically harmful, as these policies (and all interventionalism) clearly is. There is not one single case where -- upon thorough analysis -- government intervention in the free market has been beneficial; rather, all cases of government intervention are harmful. Since you obviously don't want to spend any time trying to understand the economics of the free market, I suggest you keep your completely ignorant and harmful opinions to yourself.

** Being a fucking lawyer, I know you're going to babble about how he won't be bankrupted due to bankruptcy law, retirement accounts, and on and on. But that's your fault, and you can't use such circular reasoning. Bankruptcy laws are just more interventionism which need to be eliminated.

***This is a grey area. Since contracts between CEO's and shareholders/board-of-directors involve transfer and exchange of property rights, it can be argued that violating them is stealing, which shoudl be criminally punishable.

Social Security is a pyramid scam.
[ Parent ]

I think your response... (4.00 / 1) (#251)
by SPYvSPY on Tue Aug 12, 2003 at 12:33:24 AM EST

...speaks for itself. Your rambling, semi-literate analysis of basic legal issues is too difficult to follow. A few choice moronicisms with my (patent pending!) translations:

No one area of government is much more efficient than any other. They are all equally crap, precisely because there is no natural motivation (as in the free market profit/loss system) for them to operate efficiently.

Translation: All government is a failure. No government can perform beneficial services because it lacks the proper "motivation".

My input: Ironic words, coming from a person that thinks betting against your own shareholders is not a conflict of interest.

It's only in outsider trading, where one tells a family member or friend, that confidentiality can be breached.

Translation: No transfers of information within the boundaries of a company can violate confidentiality obligations.

My input: Heard of "need to know"? How about affiliate relationships? Or "chinese walls"? These are basic concepts in corporate culture, of which you are demonstrably ignorant.

Need I go on? Somehow, I suspect I will.
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[ Parent ]

typical of lawyers...run away from the issue (1.50 / 4) (#256)
by dh003i on Tue Aug 12, 2003 at 10:56:35 AM EST

You have completely side-stepped the entire issue, which is that, as I have proven, there are effective ways for the free market to deter and punish incompetence and maliciousness by managers. You have not in any significant way refuted that, precisely because you can't. The free market works fine without govenrment tampering. Of course, being a lawyer, you don't want to admit that, because all this useless legislation is a job-opportunity for you.

Translation: All government is a failure. No government can perform beneficial services because it lacks the proper "motivation".

Government will always fail trying to do things that are not appropriate for it, yes. Interfering with the market is not an appropriate government function. The only appropriate function for the government is to protect the property rights upon which the free market is based, as well as the right to one's body. All other rights are derivatives of these rights.

If you want proof, you can look at history. The government single-handedly caused the Great Depression by it's unchecked inflation, and prolonged it by unnecessary interventionism, which prevented the market from quickly correcting the situation and liquidating mal-investments.

My input: Ironic words, coming from a person that thinks betting against your own shareholders is not a conflict of interest.

That's up to the shareholders to decide, not you, or the government. Even if they do decide that, the remedies should be in civil, not criminal, courts. By your twisted logic, no-one who works for a corporation should ever be able to sell company stock to invest in something else, because s/he'd be "betting against the corporation". The only situation where there is something malicious going on is where an executive does something to cause the stock to go down in the short-term, shorts the stock, then buys it back low. That's clearly acting against the interest of the company.

Of course, the natural checks on this kind of behaviour would discourage that, as well as his long-term interest in the company doing as well as it can. The gains to be gotten from some insignificant short-term volatity in stock price are largely irrelevant compared to enormous long-term increases in value, and one's yearly salary. And, of course, it's highly doubtful that anyone other than an executive could be in such a position to manipulate the stock-price like that, so your entire connundrum of insider-trading falls apart for low-level employees.

Ultimately, it is up to the shareholders (property-owners) to decide what is appropriate and what isn't, not you or the government. You trying to decide what's appropriate for insiders to do amounts to nothing more than a violatioin of the share-holder's property rights (theft).

I'll give you that breech of confidentiality can occur within a corporation. Hardly significant to the point, though.

Social Security is a pyramid scam.
[ Parent ]

Beating a Dead Horse... (4.50 / 2) (#257)
by SPYvSPY on Tue Aug 12, 2003 at 12:44:50 PM EST

You haven't proven your point, no matter how many times you say that you have. As I have stated previously, the very fact that the government has passed restrictive laws and authorized regulation of insider trading is evidence that certain insider activity threatens the health of the market.

Do you think the government undertakes such regulation because it is a malicious organization hell-bent on "distorting" market forces? Do you expect anyone to give credence to your absurd platitudes, such as the notion that every single person acting on behalf of the government not only knows less than you, but is an outright moron?

Your persistent fixation on the distinction between civil and criminal penalties is a good example of your unsophisticated legal comprehension. Criminal penalties apply in any instance where the public's rights are at stake, as is the case where conniving executives rob their shareholders of share value, and threaten confidence in, and participation in, the broader market. A public interest is at stake when insider's abuse their privilege, and that is why there is a criminal component (as well as civil remedies) to insider trading restrictions.

The fact that I am a lawyer is evidence of two things: (1) I am trained in matters of corporate law, ethics and I have practical experience with the very topmost echelon of corporate culture (i.e., Wall Street) on a daily basis, and have for years, and (2) I am able to follow a reasonable argument, and make my own. These are two qualities that you lack (among others, such as a basic command of what is presumably your native language).

If you would put down your self-help, investment guru, bestseller, snake-oil books for two seconds, you might have time to read the books you really need: Farnsworth on Contracts, O'Kelley and Thompson on Corporations, and Stone and Seidman on Constitutional Law. These are the basics that every second year law student (e.g., some twenty-four year old punk) knows and you don't. Oh, and while you're at it, you ought to pick up Strunk and White, and clear up some of those issues with possessives that you seem to have slept through in tenth grade--LOL!
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[ Parent ]

give your chest-thumping a rest (1.66 / 3) (#258)
by dh003i on Tue Aug 12, 2003 at 01:36:54 PM EST

Your acclaimed knowledge of the legal profession is completely irrelevant to economics, a topic which you obviously have no understanding of.

As I have said again and again, it is up to the shareholders -- not some pompous ass by the psuedoname of SPYvSPY -- to decide what behaviour is and is not appropriate for the managers of a company they own. If a manager's behaviour is in violation of his contract, then he is in the wrong and should be punished in a civil court, via lawsuit. You can argue that his violation of his contract was also a violation of the owner's property rights (theft), but that's as far as reasonable criminal penalties can go. There is no such thing as "the right to make a profit" or the "right to be confident in those you hire". That is obviously what you're proposing, and is hogwash.

Government intervention has done nothing to deal with the largely fabricated problems you and others make up about insider-trading. In fact, the interventionism supported by you and others like you has diminished the natural control that shareholders can exert over their property, as I have shown by pointing to three examples where interventionism by do-gooders like yourself have diminished shareholder control over their own investments. Insider trading is only a problem when combined with malicious activity on the part of the insider, designed to benefit himelf (or his friends) at the expense of the company. Period.

In all other cases, it is harmless, because he is merely acting on what he has observed, which you could argue is reasonable activity. Of course, other investment concerns make the idea of selling in anticipation of a short-term set-back a bad idea, such as taxes, and the problem of timing your re-entry at the lower price. But, if you don't like that, then don't invest in companies that allow insider trading, or don't invest in companies that allow insiders to own stock.

The natural market forces provide strong incentives for individuals to abide by their contracts, as I have pointed out above. Those who don't will eventually be exposed, and if they violated their contract, will lose their job, be sued, and have a poor reputation (which is not good for long-term career goals). So, it is clear that the free market does not need any help from the government and know-it-alls like you. The free market has worked "economic miracles" in formerly ruined countries (e.g., Germany after WWII); it's only when government interferes that problems start occuring (see Denmark).

Yes, all interventionists in the government are clearly either incompetent or ignorant, as is anyone who supports government intervention in the free-market. There is not one example where government intervention in the free market has ever proven helpful. Why do they intervene, despite interventionism's constant failures? Because they only think as far ahead as the next election, and want to tell the public that they're "doing something". It looks good when the Congress and the President can say they're doing something to "help the economy recover from hard times" and "help the American people". Of course, they then use their interventionist failure as a justification for yet more interventionism.

You can look to the Great Depression for a spectacular example of that. The Great Depression would never have happened if the government had let the market operate without intervention. The depression started on September 3, 1929 (when the Bull Market came to an end), then there was the severe downfall on Black Tuesday, October 29th. By Novermber 13th, the index had fallen from 452 to 224. This was a severe correction, but only a year before, the stock-market was at 245, so it was really a return to sanity. If  the government had stayed out of matters, the recession would have been over in a year. However, the government decided to intervene, setting up a slew of terrible policies, which turned what should have been a one-year correction into a great depression, which lasted 10 years.

Of course, I don't expect a pompous ass like you to bother trying to understand something important, like economics. The fact that you claim to have some legal knowledge -- which seems to be more irrelevant chest-beating than anything else -- is completely irrelevant to the fact that interventionism is bad economics, laissez faire good economics.

Social Security is a pyramid scam.
[ Parent ]

Humm.. (3.00 / 2) (#260)
by Zombie Joseph Stalin on Tue Aug 12, 2003 at 05:04:45 PM EST

Can eatink your brain?

"BRAAAAAAAAIIIIIIINS! "
--The Terrorists
[ Parent ]
and please don't refer irrelevant issues (1.50 / 4) (#263)
by dh003i on Tue Aug 12, 2003 at 07:35:57 PM EST

Farnsworth on Contracts, O'Kelley and Thompson on Corporations, and Stone and Seidman on Constitutional Law. These are the basics that every second year law student

As important are the things these men may have to say about law, their opinion is completely irrelevant to the matter, which is aslmost solely a matter of economics -- namely, that government intervention (no matter the form) in the free market is harmful.

If you want to have anything half-way intelligent to say on a matter which is completely in the realm of economics, then I'd suggest you read some books by individuals who know what they're talking about regarding economics. Namely, Murray Rothbard and Ludwig von Mises. You can even read these books for free here. How kind of these unrelenting supporters of the free market to make their books available for free. They speak to the economics of the issue.

If you want to understand anything about investment, I'd suggest you read some investment books by individuals who have proven themselves to be brilliant investors over several decades. Philip Fisher's Common Stocks and Uncommon Profits is a good starting place. Benjamin Graham's The Intelligent Investor is also worthwhile. And if you really want to learn something regarding quantitative analysis, Security Analysis by Graham is of the highest quality. These are not "snake-oil" books by self-proclaimed investment gurus. These are books written by men who have excellent trackrecords over very periods of time. During his life, Graham averaged 21% return a year, a period of time spanning the entirity of the Great Depression.

The caliber of these investors can be measured by the caliber of those who endorse them. Buffet has said he's "85% Graham and 15% Fisher". He's also given a famous lecture on Graham, The Superinvestors of Graham and Dodddsville. That you claim to be affiliated with the "topmost echelon" of corporate America and have no knowledge of these men suggests three things to me: (1) You are an ignorant idiot who knows nothing noteworthy about investing; (2) Those you work with are ignorant idiots who know nothing about investing; (3) You are lying.

Social Security is a pyramid scam.
[ Parent ]

Sorry, but... (4.66 / 2) (#267)
by SPYvSPY on Wed Aug 13, 2003 at 10:23:44 AM EST

..dismissing the rule of law won't get you anywhere except in jail. My advice to you would be to stop whining about the injustices of government intervention, and ask yourself why you don't have the power to do anything about it? You also haven't provided any convincing rationale for why the government would take such a malicious approach to the market, and your argument that everyone in the government is a fool just doesn't fly. Why would the government deliberately distort market forces? I'll tell you why (I already have): in order to protect public interests. Public interests are manifest in laws. Private interests (like your personal crusade against intervention by government) are what's irrelevant. Why? Because you can contract for almost anything with almost anyone. I dare you to show us the contracts that you have with the companies that you invest in. I'm guessing that you don't have any, or, if you do, they're the off-the-shelf forms from your brokerage or the company itself. Here's the point: in lieu of lots of private contracts between investors and their investments (which would never happen anyway due to lack of leverage on the individual investors' parts) the government can "contract" on the public's behalf, by imposing criminal penalities (and stipulating civil remedies) through legislation and regulation.

The point you continually miss is that the government is nothing more than a leverage bargaining mechanism for the public. If you have a philisophical opposition to leveraged bargaining, fine, that just means that you are a white collar fuck that has no respect for the plight of common, working people. I suspect that you are a common, working person, though, which makes you the worst kind of self-hating sycophant.
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[ Parent ]

as usual, dodging the issue, and wrong (1.66 / 3) (#268)
by dh003i on Wed Aug 13, 2003 at 11:56:43 AM EST

dismissing the rule of law won't get you anywhere except in jail.

Apparently, you have a problem reading plain English. Did I say that it is wise to disobey the law? No, I did not. It is not wise to disobey the law for the same reason it isn't wise to incite the anger of a drug-lord. Rationale people do not normally do something that will result in extreme and cruel violence being exercise against them. Of course, this does not in any way mean that the law is right and just, which is what you seem to be arguing. In other words, might makes right. This, of course, is a morally bankrupt argument.

why [would] the government...take such a malicious approach to the market...[w]hy ...deliberately distort market forces?...to protect public interests

Wrong, as usual. Those in the government distort market forces for one of two cases: (1) They truely think that it will protect individual rights, in which case they are either ignorant or idiots; (2) Despite knowing that it's harmful, they want to be able to say, "I'm fighting for the little guy," and get good press, in which case they are evil. As I have shown, government interventionism is always harmful. It harms everyone, and often provides some special benefit to a select group at the expense of everyone else.

Of course, the government was not always so interventionist (socialist). The last non-meddling administration was that of Coolidge, who once said something along the lines of "for four years, this Hoover has given me unsolicited advice, all of it bad". Hoover, of course, was an interventionist, as was FDR, both of whom were largely responsible for the Great Depression with their interventionist tampering into the market.

Unfortunately, Coolidge chose not to run for a second term, as he was a rather bizarre and extremely private man. He was undoubtedly the most brilliant President of the last century, the only one who had any respect for the free market. After him, the tampering of crack-pots like Hoover and FDR -- which is heartily supported by Keynesian nutcases like you -- sent this country into a series of unfortunate boom-bust cycles.

Private interests...are what's irrelevant

Again wrong. The only thing that's relevant is individual's rights. The government -- if you can justify it at all, being a coercive concentration of violent force -- has only one legitimate function: to protect our rights. Ultimately, all of our rights can be reduced down to property rights and the right to our body (all other rights are derivative).

the government is nothing more than a leverage bargaining mechanism for the public

That function is illegitimate. The government has no right to violate individual's property, which is what it does with its interventionalism forbidding insider-trading, its labor-law legislation, its legislation against financial institutions holding large percentages of a company's stock, and its anti-merger/trust legislation. Private enterprise can effectively and more efficiently serve this purpose, giving investor's leverage and acting as oversight. Private enterprise will provide that function far more efficiently than the government, which is inherently corrupt, financially irresponsible, perpetually bankrupt like our banks via fractional reserve (hence the need to steal our money by taxation and inflation), and financially inefficient.

If you have a philisophical opposition to leveraged bargaining, fine, that just means that you are a white collar fuck that has no respect for the plight of common, working people. I suspect that you are a common, working person, though, which makes you the worst kind of self-hating sycophant.

Ah, so we get to the heart of the issue. Communism. Your arguments throughout this thread, and specifically in this quote, are very much in line with the lack-of-thinking of Karl Marx. You also engage in fallicious reasoning, attacking the messenger not the message. Whether I am rich, middle-class, poor, whatever, is completely irrelevant to the fact that the unhampered free market is more efficient at dealing with needs and problems than any other mechanism (especially the interventionist socialism of our government). It seems to me that you are just another pseudo-communist anti-capitalist. Maybe you should move to Cuba or China, to see the effects of your economic thinking (if unchecked by rational individuals like myself).

There is no such thing as "too much of the free market". There is, however, such a thing as "too much socialism" (namely, any at all). Russia proved that, and Denmark is proving it over again.

Social Security is a pyramid scam.
[ Parent ]

As usual... (5.00 / 2) (#269)
by SPYvSPY on Wed Aug 13, 2003 at 01:12:52 PM EST

...you avoid the issues by attributing sound ideas to simple-minded "schools of thought" (e.g., communism). You have consistently failed to address the logistical problem of aggregating the bargaining leverage of individual investors. Labelling the effort to consolidate the interests of the general public "communism" or "Marxism" may be correct in a sophomoric and purely academic sense, but your references to Cuba, China and Denmark indicate that you equate the academic notion of representing public interests with the application of Marxism in those countries. I really don't give a flying fuck about your personal Red Scare. I'm advocating a limited consolidation of public leverage through organized bargaining via the rule of law, using governmental authority to balance the interests of individual investors against what's most appropriate to the health of the "free" markets writ large. That is hardly a managed economy, fool. Keep your dirty little prejudices out of this discussion, and stick to the issues at hand.

I never said that you advocated disobeying the law; I said that you dismissed the rule of law altogether, which you did. You told me that the law isn't relevant to matters of economic markets, which might be the single stupidest comment ever made on K5. I mean, talk about throwing the baby out with the bath water. How, without the rule of law, will you enforce your (fictitious) contracts that you so confidently (and disingenuously) claim investors (such as yourself, presumably) negotiate with the executives of their target investments in order to preclude abuse of insider privileges?

The biggest joke of this entire discussion is the very economy that you claim to be a failure is also the strongest economy in the world, which in my book, is the measure of success in these matters. Reality confounds you at every step.
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[ Parent ]

your ideas are about as sound as socialism (1.50 / 4) (#271)
by dh003i on Wed Aug 13, 2003 at 05:31:54 PM EST

you avoid the issues by attributing sound ideas

None of your ideas are sound. They are precisely the "ideas" that have created perverse distortions in the free market, and have caused all of the depressions in the past hundred years, as well as unnecessarily prolonged them. The business cycle is indeed caused by idiots like you with their tampering in the free market, inflation, and immunization of banks from paying up.

You have consistently failed to address the logistical problem of aggregating the bargaining leverage of individual investors

So, apparently, you not only have problems reading plain English, but you also don't see certain things (namely, those which you don't want to see). I specifically said that there are natural free-market checks on malicious or incompetent behaviours by executives. I also later specifically said that the free market can provide corporations designed to offer leverage and centralization services to both shareholders and consumers.

What is most unfortunate is that the free market does not have a natural check on the idiotic spewings of individuals like yourself.

I'm advocating a limited consolidation of public leverage through organized bargaining via the rule of law, using governmental authority to balance the interests of individual investors against what's most appropriate to the health of the "free" markets writ large. That is hardly a managed economy

A completely managed economy is impossible. Even the soviet union was not a "managed economy". Rather, it was a partially restricted and partially managed economy. Even draconian force a hundred times greater than that exercised by the Nazis and Communists of Germany and Russia...even such a force could not create a completely managed economy (due to black-markets and underground trading which would occur). Furthermore, such an economy would implode.

What you are arguing for is tampering with the free market -- managing it. Specifically, micro-managing it, stealing sovereignty of shareholders over their property, and reallocating it to the government. What you speak of when you say using the government authority to enforce your arbitrary standards is the use of violent force (since that is what government authority is).

You told me that the law isn't relevant to matters of economic markets...How, without the rule of law, will you enforce your (fictitious) contracts that you so confidently (and disingenuously) claim investors (such as yourself, presumably) negotiate with the executives of their target investments in order to preclude abuse of insider privileges?

The rule of law is necessary to enforce these basic property rights. What is not necessary, however, is the current enormous Leviathon state. The only legitimate function of the government is to protect property rights and protect an individual's right to his or her body (e.g., punishing and deterring murder, rape, torture, etc). The government has clearly gone far far beyond this scope, and perhaps as a result, is no longer able to as effectively carry out these basic functions.

As I have also shown, insider-trading itself is not the problem. That you continue to insist it is demonstrates you are either incompetent or simply need someone to be envious of. If A sells because he knows (from inside information) that the stock will go down, and B buys, then nothing terrible has happened. If A hadn't sold, B would have bought from someone else, C, and B still would experience a loss. The only difference is that instead of A profitting, C does.

The problem is managerial incompetence and maliciousness. And there are natural market checks on this, some of which operate whether or not the corporations shareholders as a whole sanction the managers. The market will not reward a poorly run company with profits. And managers who violate their duties (either by incompetence or maliciousness) will acquire poor repuations, and will not be hireable.

As for the so-called "leverage" you continue blathering about, the free market can provide that to shareholders, without the government's meddling. In fact, government meddling in regards to insider-trading only violates a shareholder's property rights. Furthermore, other government meddling makes it more difficult for shareholders to exercise their control over their own property. If, for example, financial institutions were able to hold large positions in one corporation, ownership would be largely centralized, and there would be leadership in ownership. This eliminates your absurd "leverage" problem. The other solution is the free-market providing companies to represent shareholders. You could also eliminate these ridiculous laws which legislate "the right to one's job" into reality, and deny property-holders their rights over their property. Then you could eliminate anti-trust/merger laws, which prevent poorly run, inefficient companies, from being taken over by better ones.

the very economy that you claim to be a failure is also the strongest economy in the world, which in my book, is the measure of success in these matters

Wow, again you are pretty stupid. Let's say I have a class, and the highest grade is a D. A D is still failing, even though it may be the highest grade.

But you insist on, apparently, "grading on the curve", which if followed strictly means that complacency runs rampent and society never improves.

I do not deny that our economy is the most successful economy in the world. That's because every other nation is even more socialist (or too primitive to be relevant) than our own. All of Europe is rampant with socialism, Denmark in particular.

The very fact that our economy is the most successful economy in the world does not prove your point; it proves my point. The US is not as socialist, does not tamper as much with our economy, as do other governments (e.g., all/most of Europe). This logically suggests that the less meddling the government does with the economy, the better; not vica-versa. That you propose the economic superiority of our own (less interventionist) nation over that of other (more interventionist) nations to somehow support your argument that interventionism is good...shows truely how stupid you are.

In regards to the US still being prosperous, despite the foolish policies supported by those like yourself, the rich can afford to be foolish longer than anyone else. This nation would be richer, yet, if the government confined itself to it's only legitimate function: protecting property rights and bodily rights. Among those who have some understanding of economics, which obviously does not include yourself, there can be no doubt that interventionist policies harm the US economy (consider the harm done by the prohibitive tarrifs on Vietnamese catfish).

Social Security is a pyramid scam.
[ Parent ]

You said... (5.00 / 2) (#272)
by SPYvSPY on Wed Aug 13, 2003 at 09:22:39 PM EST

...This nation would be richer, yet, if the government confined itself to it's only legitimate function: protecting property rights and bodily rights.

The government *is* protecting property rights. It steps in on behalf of individual investors to prevent abuse of executive privilege in order to protect shareholder value. Your fundamental problem is that you think the government is out to get you, when, in fact, the government (at least in the limited case of insider trading regulation) is out to protect the value of your investment from Wall Street's marrow-sucking nepotism and avarice. I've said it before, and I'll keep saying it until you fuck off and die: Insider trading regs represent government acting in the collective best interests of both investors and the market. You keep saying that market forces will work it out, and that investors can take care of themselves, but so far you've only offered two totally lame and impracticable mechanisms for this self-regulation: (1) voting with wallets, and (2) private contractual remedies. I've already shown that neither of these will work without collective bargaining power on the investors' side. That's where the government comes in. If you claim in your next post to have demonstrated how the market self-regulates, you will only further mock yourself.

As a parting shot, rigorous enforcement of insider trading laws not only encourages public confidence and participation in the markets, but also reduces concentration of ownership by (a) causing shareholding to appeal to a broader group of smaller investors (who feel their interests are being protected by the regulations), and (b) reducing the incentives for large shareholders to buy up large concentrations of the shares because of the reduced "benefits" of being a prominent "friend of the firm". Icing on the cake.
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[ Parent ]

you are a mighty dumb fuck (1.25 / 4) (#273)
by dh003i on Wed Aug 13, 2003 at 11:06:36 PM EST

And typical of a lawyer, you never shut up, even when you are wrong. Your self-proclaimed knowledge of law is completely irrelevant to economics. You could be a Johnny Cochrain or a Harvard Professor with a Nobel Prize in law scholarship: you still don't know a thing about economics. You have decided -- apparently as some all-knowing center of knowledge -- that you, not the shareholders of a company, have the right to determine how their property is used.

The government *is* protecting property rights. It steps in on behalf of individual investors to prevent abuse of executive privilege in order to protect shareholder value.

No, actually, it is not. By mandating these anti-insider trading laws, the government is violating the property rights of owners, by forcing them to make their employees accept terms they otherwise wouldn't.

As I have also demonstrated -- and you have miserably failed to refute -- insider-trading itself is not the problem. No-one is harmed by insider-trading. Someone was going to lose money, someone going to make it, anyways. The only thing that is harmful is when employees do not do what's in the best interest of the company, whether it be because of incompetence or maliciousness. Whether or not employees are acting in the best interest of their company is completely irrelevant to insider-trading: there is no correlation, nor any causation, what-so-ever. An intellignet employee engaging in insider trading could be doing his damn best for the company, while one not engaging in it could be slacking off, stealing from the company, and clocking more hours than he actually works.

You keep saying that market forces will work it out, and that investors can take care of themselves, but so far you've only offered two...

So, aside from all your other flaws (such as idiocy, arrogance, and bullheadedness), you're also a liar. I initially offered 5 natural free-market checks on both managerial incompetence and managerial maliciousness. All five of these free-market checks work fine in an unhampered free market, but are currently prevented from being effective by government interventionism. I later offered an additional free-market solution, which is that in the unhampered free market, corporations will form to act as oversight, probably on a subscriber-basis. If shareholders deem this service worthy, they'll invest in it. If not, then obviously it isn't.

In fact, this method of market-leverage is inherently better than your proposed "government solution". Firstly, the market decides. So, it's penetration will be market-optimal, meaning no waste. Secondly, the tax-payers will be relieved of a multi-billion dollar burden. It is inherently immoral for those who take on investments (and thus their risks) to pass on the risk to the rest of society, instead of burdening it themselves (similarly on bankruptcy). Thirdly, corporations are *always* (end of discussion) more efficient than the government. This is because they can use the profit-loss test, which is a measure of how good they are doing. It is also because they are the property owners, thus have incentive to use their property with maximal efficienty, and preserve it's value.

Now, in some cases, we don't want the government to be efficient. I would hardly want to see the IRS as efficient as, say, IBM.

I will continue correcing the raw bullshit you spew until you shut the fuck up. Harmful and ignorant ideas like the ideas you propose must be opposed by rational individuals at every turn.

Social Security is a pyramid scam.
[ Parent ]

As efficient as IBM? (5.00 / 1) (#274)
by SPYvSPY on Wed Aug 13, 2003 at 11:19:00 PM EST

Now we really know how little you experience you actually have in the real corporate world, assuming the reference was to Global Services. Hey! You up there in the ivory tower! Down here in the trenches, we appreciate the SEC. We wish they were more aggressive in protecting our (the shareholders') interests. Sarbanes-Oxley might be a pain the rumps of executives, but it's in the best public interest. As an investor myself, I have no idea how I would benefit from your beloved five rationalizations (three of which I discarded for being absurd on their face). You can continue to assault my status as a lawyer. The fact is that I put in the time to do the hard work to have access to the boardrooms on Wall Street. I personally know the people that you worship, and whose ass you've got your nose in, and I can tell you that you're "barking up the wrong tree" so to speak. The ethical and pragmatic side of this argument is mine. Your argument is as unproven, academic and impracticable as Marxism. Oh, and where are those contracts that I asked for? Haven't got them? Not surprised.
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[ Parent ]

in other words, you have no rebuttal (1.66 / 3) (#275)
by dh003i on Thu Aug 14, 2003 at 12:17:58 AM EST

So you've chosen to focus on one narrow and completely irrelevant comment. The point was that corporate America is more efficient than government. Now, maybe IBM isn't the best example of that anymore (considering they were a monopoly, and are still extremely successful, I'd say they've done pretty well); but, failing IBM, you could cite Microsoft as an example of efficiency (they seem to be pretty efficient at crushing most competition). You have not in any convincing way shown how the natural market forces I pointed out are deficient, because you can't. You simply said, "no, doesn't work", or proposed some lame reason for why they "don't work" and I rebutted you (e.g., your lame argument on 'leverage', which I handely demolished). "The people I worship"...well, unless there's someone out there who agrees with me on everything, I'm going to worship anyone or anything. I highly doubt you've ever met most of the people I respect, such as Rothbard, Mises, Fisher, and Graham. That's partially because they are all dead, and partially because you aren't of a worthy caliber to associate with these kinds of people. There is no practicality to your argument; a practical individual realizes that the free market works fine without government tampering, and let's it do it's job. Your arguments are also unethical, as they transfer the risk of investments from investors to the tax-payer (who's money is already being stolen by taxes and inflation).

I will not engage in irrelevant ad hominem's with you. Your carreer (if any) and my career are completely irrelevant to the topic of discussion. The fact that you mention your career only suggests that you feel you need to bolster a weak argument by trying to appeal to an authority (e.g., being a lawyer).

Social Security is a pyramid scam.
[ Parent ]

Thumbs up! LOL! (5.00 / 1) (#276)
by SPYvSPY on Thu Aug 14, 2003 at 01:15:49 PM EST

You cited two monopolists as examples of efficient operations! And you claim to be an expert in economics? Do you realize that monopoly power represents an inefficiency in the market (i.e., concentration of power to control price)? Do you actually think that efficiency as a market force is measured by the ability to "crush most competition"? I'll forgive your poor example, but not twice.

You are digging a bigger hole under your tightrope of credibility with each post. It's obvious your "knowledge" of economics has no counterpart in pragmatic reality, based on the spurious re-hashing you've given of your mentors' theoretical musings, and your weak real-world examples. I wonder: are you just a glutton for ridicule?
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[ Parent ]

and how do they become monopolies (1.66 / 3) (#277)
by dh003i on Thu Aug 14, 2003 at 03:41:01 PM EST

So, how exactly do you think they become near monopolies, as in the case with MS? (nope, it's not a monopoly: there's also Apple, GNU/Linux, *BSD as alternatives). They obtain their size by doing good business. If they don't continue doing good business, then market forces will compete down their size (as may now be happening with Microsoft).

Typical of some stupid liberal fuck, you demonize large companies, the favorite whipping boy of raving liberals. By the way, in case you hadn't noticed, IBM isn't anywhere near being a monopoly anymore. Of course, there is nothing wrong with a company that naturally grows to large size and market-dominence. It does so precisely because it *is* satisfying consumers, thus doing a good job. Once it starts failing to do so, competition becomes more and more prominent.

The business' that are run inefficiently are the one's that are going bankrupt, not the financial rocks. If you think that IBM and Microsoft are run inefficiently (like the US government), then you are obviously stupid.

I may not like Microsoft's products, nor their business methods and political lobbyign. However, there is no denying that Microsoft operates efficiently. In fact, on a score of 1 to 12, Microsoft is operating at a 12 all the time.

By the way, moron, monopolies are not some "inefficiency in the market" or a "flaw in the market". They occur solely because of the special priviledges and monopoly rights that the government grants companies via interventionalist policies (in this case, copyrights and patents).

So, now you have demonstrated that not only do you know nothing about economics, but also that you know nothing about corporate America. You've obviously been brainwashed by propaganda about Microsoft into thinking that they are some giant manifestation of sloth.

Now, the fact that there may be companies out there (specifically, in the computer industry), such as Lindows, that are more efficient than Microsoft (e.g., by offering superior-priced products), does not negate the fact that Microsoft, and just about any business that isn't going bankrupt, is inherently more efficient than the government. That you can't comprehend this suggests that you probably have a complete lack of understanding of how things work in the government and in business.

In the government, failure is used as a reason for more funding; if education is failing, we must pump more money in it, even though the money currently pumped in is excessive. Thus, failure is not punished, but often rewarded. In business, failure is always punished; companies that sell products or services that don't do what they should do fail.

In the government, there is no incentive to economically preserve resources, or to check spending. Since the government often does not own actual resources -- and prevents anyone else from owning them -- a tragedy of the commons occurs, because resources are uneconomically over-used. Consider various metal-mines, which the government prevents corporations from owning, but instead rents out to them the rights to mine. Since the corporations don't own the resource, thus have no interest in preserving it's capital value, they will take as much from it as they can. Furthermore, in government, there is no check on spending and debt, thus no reason to operate efficiently. The tax-payers will pick up the bill, one way (taxation) or another (inflation), both of which amount to nothing short of stealing.

If for nothing else, any measure which increases the government's domain should be avoided just for that reason: increasing the power of an inefficient and oppressive organization, at the expense of US citizens, who are stolen from either by taxes, tarrifs, inflation, fees, or all of the above. Worse, not only is their money stolen, but so too is their liberty and sense of independence.

In the unpleasant time that we have conversed, you have demonstrated a complete lack of knowledge of economics and business, as well as how the government and corporations operate. If you want to correct your obvious deficiencies in economic knowledge, I'd suggest that you read works by the individuals I mentioned (specifically Mises and Rothbard). These are individuals who, though unfortunately recently deceased, have clear and precise thinking on economics, which applies to the real world in obvious fashion. They certainly have more knowledge of economics than you, and their works arguably demonstrate more understanding of economics (along with more predictive capabilities) than any other economists. Mises writings explain every depression we have suffered, and indeed Mises predicted the Great Depression. So too did those who understood him predict the depression which we may only now be exiting out of.

Social Security is a pyramid scam.
[ Parent ]

wow, how silly (5.00 / 1) (#270)
by infinitera on Wed Aug 13, 2003 at 01:51:33 PM EST

The government has no right to violate individual's property Property is universally acknowledged to be a social phenomenon. It does not exist 'naturally', and it requires enforcement by governments/societies. Note that I'm not saying this is a good thing, just how it works in our world. Society has claims to your property, because society is what makes your property exist as such in the first place. The precise control over it is of course what politicians debate, but so long as there is government, that control exists and is completely consistent with the social order.

[ Parent ]
Try education first. (3.00 / 1) (#190)
by Sanction on Fri Aug 08, 2003 at 01:36:12 PM EST

While you may have some very compelling arguments as to why insider trading should not be illegal, you are completely wrong about the current laws.  The original poster is completely right, acting on non-public information is illegal, no matter how you may want the world to be.  Your assertion that all information is effectively public is also completely untrue.  The only means by which a lot of information could become public knowledge is by the violation of NDA's or various methods of corporate espionage.  For example, in this case, no one can legally reveal the source code for Unixware.  This information cannot be public knowledge.  If an insider knows that the entire case is complete and total fabrication, and that all claims about what is in the Unixware code are false, there would be serious questions about the legality of trading based on that information.

That said, you provide some very interesting links to some excellant articles which I look forward to reading in depth.  I am not entirely comfortable with how closely things are controlled as to the flow of information, but see the necessity in some cases.  Thanks for the good reading.

I can either stay in and be annoying or go out and be stupid. The choice is yours.
[ Parent ]

Certainly makes me dislike SCO but . . . (2.50 / 2) (#31)
by nadreck on Wed Aug 06, 2003 at 10:20:35 AM EST

Calling for their arrest seems extreeme. I have a very long list of people whom I think deserve it more. However thanks for bringing the case to my attention. I gave up my unixware systems quite a while ago and don't intend to support them anymore. However, I had given up on them a long time ago. I hate Bill as much as the next computer geek, but Noorda seemed to lose it in his obsessive hate of Bill and stopped making rational decisions because of it.


Nadreck of Palain VII (ok, ok, really Jim Grant of Yellowknife)

I disagree (none / 0) (#170)
by jeti on Fri Aug 08, 2003 at 05:25:18 AM EST

SCOs unproven allegations have impact on IT projects all over the world. They hurt an economy that currently isn't in the best state to begin with. The case is likely to have cost jobs in smaller Linux companies.

The current CEO of SCO seems to be specialized in buying worthless companies, and suing for litigation. The new owners were already able to sell their stock at inflated prices.

If they made a profit, it will likely be invested in another shitty company and to further hurt the economy, and misuse resources of the legal system.

[ Parent ]

I dunno (none / 0) (#180)
by darthaggie on Fri Aug 08, 2003 at 09:40:06 AM EST

Calling for their arrest seems extreeme.

Maybe. We'll see what was what when the dust settles, but I believe they're engaging in fraud, barratry, extortion and market manipulation. In most jurisdictions, much of that is criminal behaviour.

On the bright side, I suspect that when the dust actually does start settling, Darl and company will find themselve on the receiving end of investor lawsuits for their pump & dump scheme...

[ Parent ]

Teh Lunix Nuttah (2.71 / 7) (#35)
by yicky yacky on Wed Aug 06, 2003 at 06:16:01 PM EST

The Santa Cruz Operation was once as much a bunch of freethinking hippies as any Linux hacker of today.

So you're saying that the average Linux hacker is suffering from multiple personality disorder: Interesting. There are many on the right who'd agree with you, but this is the first time I've heard it from one of Linux's own, or is it being spoken by a rogue personality, one that just slipped out?




yicky yacky
**************
'The actual reasonable Britons are correct, you're being a cock.' - Hide The Hamster.
Can only speak for myself (3.50 / 2) (#38)
by xL on Wed Aug 06, 2003 at 07:23:42 PM EST

But as a linux developer I don't find being classified as a freethinking hippie insulting. My spider sense tingles a little on the troll scale if you add "commie" to the mix, but that is just good natured fun. The fact that I went through a fuzzy art academy where I learned to code C under ever increasing levels of bio-chemical intoxication may or may not make me the typical linux hacker.

I think the majority of people who feel uncomfortable being called nerds for their insignificant selection of a piece of insignificant software on a machine that has limited significance in the social lives of most people living in this world are not developers. Most of the wizards are either low on the nerd scale, or so amazingly high that the case is beyond caring for both wizard and his surroundings.

[ Parent ]

completely missed the point [nt] (none / 0) (#39)
by yicky yacky on Wed Aug 06, 2003 at 07:35:14 PM EST




yicky yacky
**************
'The actual reasonable Britons are correct, you're being a cock.' - Hide The Hamster.
[ Parent ]
you had one? (5.00 / 3) (#74)
by davedean on Thu Aug 07, 2003 at 12:43:25 AM EST


--
Dave Dean
Google loves me again! New Formula!
[ Parent ]
Wow. First mention of Yggdrasil for a long time. (3.40 / 5) (#36)
by komet on Wed Aug 06, 2003 at 06:52:01 PM EST

Yggdrasil plug-and-play Linux was my first Linux installation, and perhaps more strangely, remnants of Yggdrasil remain on my system to this day - I never really installed another distro, I just downloaded lots of stuff, compiled it myself, then copied all the binaries over to the next machine, and the next, etc. My systems still have a.out format libc4 libraries on them. Probably no longer needed, but you never know.
--
Any technology which is distinguishable from magic is not sufficiently advanced.
I thought Yggdrasil was a 1000 hp Overlord? n/t (5.00 / 1) (#45)
by JChen on Wed Aug 06, 2003 at 08:37:13 PM EST



Let us do as we say.
[ Parent ]
No, it's a big ass tree. [n/t] (none / 0) (#50)
by Theranthrope on Wed Aug 06, 2003 at 09:23:50 PM EST


"Turmeric applied as a suppository will increase intelligence." -- HidingMyName
[
Parent ]
Same here (4.00 / 1) (#58)
by the on Wed Aug 06, 2003 at 10:19:08 PM EST

You could fit a whole installation on a 320MB HDD. Amazing.

--
The Definite Article
[ Parent ]
Logical flaw... (3.37 / 8) (#40)
by skyknight on Wed Aug 06, 2003 at 07:41:10 PM EST

Are SCO's claims a flaming pile of crap? Maybe they are. I am inclined to believe so, but I don't know for sure. I am not aware of the particular code under dispute. All I have to work with are the sound bytes I've heard flying back and forth in the press. However, you do make a flawed argument regarding your culpability in the hypothetical situation that SCO does have grounds for a claim...

Even if SCO's claims are true, it is not a violation of their copyright for me to possess a copy of their code. Instead, any copyright infringement was committed by the vendors who supplied me with the Linux distributions I use.

You may not be the one initiating copyright infringement, but you are accepting stolen goods. The law does make distinction between the two acts, but they are both illegal. Were that not the case, then IP would be unworkable, as you could have an "IP suicide bomber" as it were, initiating all of the infringements, and then distributing the IP to everyone else. Were all of the indirect recipients of the IP clean, such that the only criminals were the ones who actually stole the IP, then IP law would be utterly worthless.



It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
Another Logical Flaw... (2.00 / 1) (#49)
by Theranthrope on Wed Aug 06, 2003 at 09:22:35 PM EST

You may not be the one initiating copyright infringement, but you are accepting stolen goods. The law does make distinction between the two acts, but they are both illegal.

SCO is, in the legal sense, putting the cart before the horse. The IBM vs SCO lawsuit won't begin until april 2005. If the lawsuit even makes to trial there won't be any kind of judement for a minimum of two years. Nobody has been found guilty of ANYTHING. Nothing is illegal.

They have no grounds for action, unless they can bull the judge into putting out some kind of injuction (which I doubt). Linux users will have to cross that bridge if it comes to it. But, SCO will not have the ability to call anything "illegal" untill they get a judgement (say, in 2007 or later)


"Turmeric applied as a suppository will increase intelligence." -- HidingMyName
[
Parent ]

Maybe you should read my post again... (5.00 / 1) (#53)
by skyknight on Wed Aug 06, 2003 at 09:31:40 PM EST

this time making particular note of the word "hypothetical" and how it affects the meaning of what I was saying.



It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
Infringement logic (3.50 / 2) (#95)
by Znork on Thu Aug 07, 2003 at 03:08:31 AM EST

Under the same logic that SCO is using, something like this would be legal:

"Do you read Kuro5hin? If you do, I must point out that one comment somewhere, violates my IP rights. I'm not going to tell either you or rusty which one it is, nor in what way it violates it so you could remove it, altho I may (under an NDA that does not allow anyone to tell either you or rusty) show independent analysts something I've written which resembles that comment. However, as you read Kuro5hin, you now owe me $699, or I'm going to sue you."

Any such claim is, of course, complete bullshit. It is not illegal to recieve, read or copy such IP as copyright law tends to require intent. If the law required anything from you beyond the due diligence of assuming that stated copyright and license on material you read and recieve through any legitimate channels is correct you would be in legal jeopardy from reading a book, a newspaper or watching TV.

Everyone involved has claimed they do not wish to violate any IP that may or may not belong to SCO, but SCO refuses to point out what they wish to claim is theirs so it can be removed.

SCO is not trying to defend any IP. They're trying to engage in extortion.

[ Parent ]

NDA (1.00 / 1) (#210)
by mayor on Sat Aug 09, 2003 at 12:58:39 AM EST

The reason of the NDA is so that the english-majors (also known as Senior Technical Analysts) who looked at the code, must write reports favorable to SCO : If their reports include disparaging comments or unhelful comments they and their employer will be sued in court; but if these lovable creatures report SCO favorably, they will not be sued for violating the NDA.



[ Parent ]

According to your logic (2.00 / 1) (#99)
by richarj on Thu Aug 07, 2003 at 03:53:35 AM EST

If a newspaper say publishes somebodies code illegally. Then everyone who reads that newspaper is commiting a crime.

Do you know how stupid this sounds? Oh wait I'll publish some illegal code on Kuroshin and when you read it, you will become a criminal.

"if you are uncool, don't worry, K5 is still the place for you!" -- rusty
[ Parent ]

Rubbish (5.00 / 2) (#102)
by Cloaked User on Thu Aug 07, 2003 at 04:56:58 AM EST

That's not the same thing at all. In the case of the newspaper, you'd only be infringing if you used or otherwise kept the code. If you just read the paper and threw it away, you'd be in the clear.

In the case of the disputed code in Linux, if SCO is proved to be correct, then anyone using affected kernels know full well what they're doing. They are using code they have no right to use, and so are infringing.
--
"What the fuck do you mean 'Are you inspired to come to work'? Of course I'm not 'inspired'. It's a job for God's sake! The money's enough and the work's not so crap that I leave."
[ Parent ]

Thank you... (5.00 / 1) (#119)
by skyknight on Thu Aug 07, 2003 at 09:21:13 AM EST

for going to the trouble to actually read my post. I thought it was fairly clear that the word "hypothetical" implied the conditional if/then construction that you correctly inferred, but between the comments and the negative ratings, t'would seem that many people didn't bother thinking before posting. Oh well.



It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
That's fine except for one thing... (2.00 / 1) (#156)
by kcbrown on Thu Aug 07, 2003 at 10:53:28 PM EST

In the case of the disputed code in Linux, if SCO is proved to be correct, then anyone using affected kernels know full well what they're doing. They are using code they have no right to use, and so are infringing.
Except that the very code in question was, at least until very recently, being distributed by SCO under the terms of the GPL, which explicitly requires that they grant license to all recipients to redistribute any of the disputed code under the GPL. The GPL says:
2. You may modify your copy or copies of the Program or any portion of it, thus forming a work based on the Program, and copy and distribute such modifications or work under the terms of Section 1 above, provided that you also meet all of these conditions:
  1. You must cause the modified files to carry prominent notices stating that you changed the files and the date of any change.

  2. You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License.
and
These requirements apply to the modified work as a whole. If identifiable sections of that work are not derived from the Program, and can be reasonably considered independent and separate works in themselves, then this License, and its terms, do not apply to those sections when you distribute them as separate works. But when you distribute the same sections as part of a whole which is a work based on the Program, the distribution of the whole must be on the terms of this License, whose permissions for other licensees extend to the entire whole, and thus to each and every part regardless of who wrote it.
That means that even if SCO is proved correct in a court of law, nobody who is using Linux kernels would be liable for infringement because the license they are using the code under is the GPL, which binds SCO in the same way as it binds everyone else. This is because SCO was knowingly distributing their code under the GPL, which means that they have automatically granted all recipients (and thus, because of the nature of the GPL, the world) a license to use and redistribute said code.

The only way out of that would be for the 2.4.19 kernel distribution to not contain the disputed code, which means that eliminating it is easy: remove or rewrite all the code between 2.4.19 and 2.4.21 which doesn't consist of bugfixes.

[ Parent ]

We wil know this.. (none / 0) (#231)
by DavidTC on Sun Aug 10, 2003 at 03:45:27 PM EST

In the case of the disputed code in Linux, if SCO is proved to be correct, then anyone using affected kernels know full well what they're doing. They are using code they have no right to use, and so are infringing.

We will know this when and if SCO issues us a cease and desist order listing exactly what we are in possession of that they own. That is how it works with copyright law.

Until they do this, everyone is completely in the clear, and can continue doing whatever they want.

-David T. C.
Yes, my email address is real.
[ Parent ]

Well fine (3.50 / 2) (#112)
by salsaman on Thu Aug 07, 2003 at 07:49:12 AM EST

If they would tell me what the 'stolen goods' were, which I may have received in error, then I would return them to their rightful owner.

However, they have not done so, thus I am unable to comply with this.

[ Parent ]

Mixing Metaphors/Laws?? (3.00 / 1) (#153)
by xsbellx on Thu Aug 07, 2003 at 10:17:02 PM EST

You may not be the one initiating copyright infringement, but you are accepting stolen goods. The law does make distinction between the two acts, but they are both illegal.

First, the standard IANAL disclaimer, additionally I am not even a resident/citizen of the United States, so as is usually the case, my comment may be totally off-base. With that out of the way, on to the comment.

I believe you are mixing two distinct types of law. Copyright acts/legislation is usually distinct and very different than criminal (felony type acts in the US) legislation. Therefore it would seem rather strange to associate the committing of one type of infraction with the consquences of another.

Criminal law typically requires a criminal intent and there are some litmus tests when it comes to the concept of "accepting stolen goods". For example, I purchase a car from reputable car dealership. I pay what would be considered fair market value for the car. I have knowledge nor is there any publice knowledge of the dealership selling stolen vehicles. A subsequent investigation proves the dealership knowingly sold stolen vehicles and I was one of those who unknowingly purchased a stolen vehicle. I, as an individual, cannot be convicted of a crimianl offense because no reasonable person could suspect the vehicle was stolen, therefore, there was no intent to commit a criminal act. On the other hand I most likely will forfeit the vehicle to its reightfull owner and be out the money I spent.

The situation with SCO/Linux, I believe, is very similar. I have every reason to believe the property is not stolen. I cannot, therefore, be held criminally responsible. I can on the other be forced to return the property to its rightfull owner and cease using the property.

So after all of that, I am not a criminal for using Linux nor can any wild stretch of the imagination conclude that. If SCO is proved to be the injured party in all of this, I will happily pay the license fee they are entitled to or I will remove the offending software.


If XP is the answer, you didn't understand the question!
[ Parent ]

Would it have been more clear... (5.00 / 1) (#154)
by skyknight on Thu Aug 07, 2003 at 10:22:17 PM EST

if I had put the word hypothetical in bold tags? I was not passing a judgment on whether or not SCO's lawsuit is a lot of tripe. I was simply saying that if you knew full well that SCO's IP had been lifted, then you couldn't shield yourself by saying that you were not the one who committed the original act of theft.



It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
RE: Would it have been more clear... (none / 0) (#164)
by xsbellx on Fri Aug 08, 2003 at 01:17:39 AM EST

Actually your point was quite clear and well stated. Unfortunately I disagree with your conjecture.

Just so we are clear on what is being debated in this hypothetical case:

  1. Hypothetically, the courts find in favour of SCO and the Linux kernel contains misappropriated SCO intellectual property.
  2. Hypothetically, SCO is entitled to compensation for the misappropriation of their intellectual property.
  3. Hypothetically, IBM and others specifically mentioned in the suit agree with outcome and will not appeal.
Hypothetically or not, I cannot begin to guess what this means to IBM or the other defendants. This, however, is not the point of this sub-discussion. Rather, the point of discussion is your conjecture that a hypothetical ruling in SCOs favour would lead to the conclusion that, I, as a simple Linux, user would have accepted "stolen goods". As I have previously stated, no reasonable person could have possibly had an inkling that Linux was "stolen". If it cannot be reasonably assumed that the property I am receiving may be stolen, I cannot be held criminally liable for "accepting stolen goods".

Other the other hand, hypothecially I may have to compensate SCO for the continued use of their intellectual property.

If XP is the answer, you didn't understand the question!
[ Parent ]

That brings up an interesting distinction... (5.00 / 1) (#177)
by skyknight on Fri Aug 08, 2003 at 08:48:33 AM EST

namely, how to differentiate between IP that was acquired before and after a discovery and ruling of there being an issue at all. In the case of, say, a desktop computer, it would be a huge pain in the ass to switch over from running Linux to running Windows, but it would be doable, and thus you could be seen as having a choice. In the case of some kind of embedded device or what have you, where the software is burned onto the hardware, this could make for a real conundrum. You would have no real alternative, and would effectively be blackmailed into paying any price that SCO demanded, tossing your device in the trash bin, or operating it illegally.

I agree with you that the law has to have ability to make common sense judgments regarding intent. Obtaining Linux software for free is indeed very different from obtaining a $10k wide screen TV for pennies on the dollar. I was just concerned that the OP was saying that theft of IP only occurs in the case of the original unauthorized taking of the IP from the creator, and not when someone obtains the IP from an unauthorized distributor. That would be just as bad as the nonsense of reverse engineerings, involving two stages: engineers who actually do the reverse engineering and thus are "dirty" and thus can't re-engineer the thing, and the "clean" engineers who take over.



It's not much fun at the top. I envy the common people, their hearty meals and Bruce Springsteen and voting. --SIGNOR SPAGHETTI
[ Parent ]
And how will they find you? (none / 0) (#192)
by Ricdude on Fri Aug 08, 2003 at 02:35:12 PM EST

IANAL, but I do watch way too much Law and Order, and I actually read most of the court documents posted on k5, /., and such.  I also took "The Consumer And The Law" in college (most useful class in the curriculum).  Seek professional legal advice before undertaking or avoiding any activities suggested within.  

If we accept all three of your premises, I believe the following will happen:

Hypothetically, if Linux, as distributed by IBM, Red Hat, Debian, et. al. is found to have the alleged SCO IP illegally inserted into it, and,
Hypothetically, if IBM is found to knowingly, maliciously, and illegally, inserted the alleged SCO IP,
Then, no one who received the allegedly infringing code after IBM's dissemmination could have possibly known it was infringing code (between insertion date and date of SCO's first filing, at least), and IBM will be held liable for any of SCO's alleged losses as a result.

Example 1: You buy a CD from a vendor at a flea market.  Said vendor is later found to knowingly distribute stolen/pirated copies of the CDs.  The infringed parties will most probably not bother even trying to track you down to extort/extract money from you.  They will simply extract a large sum of money from the vendor, including sufficient damages to cover the copies sold.

Example 2: Ford knowingly includes Chevy IP in the manufacturing of it's latest vehicles.  Chevy will most probably not come to you and ask for a fee for the continued use of your Ford.  They will take a fee for each infringing vehicle sold by Ford.

Again, IANAL, but it seems to me that SCO has zero legal authority to extract money from Linux users under any circumstances, provided said users were not aware of allegedly infringing code included therein.  I certainly didn't know about it when I downloaded Red Hat X some months ago.  Most casual users wouldn't know about it if they don't read a particular subset of internet news sites.  At this point, their only recourse is to attempt to get sufficient damages from IBM.  Slim chance at best.

[ Parent ]

Stolen goods. (none / 0) (#178)
by darthaggie on Fri Aug 08, 2003 at 09:31:35 AM EST

You may not be the one initiating copyright infringement, but you are accepting stolen goods. The law does make distinction between the two acts, but they are both illegal.

Except that if you recieve an item in good faith - that you do not posess knowledge that the item is indeed illegally obtained, then you're not liable to a charge of posession of stolen property.

If SCO should get a judgement declaring their copyright has been infringed, then we will not be able to run or redistribute versions of the linux kernel that infringe. And that's per the GPL.

Thus SCO's "licensing" is so much bullshit. Either I can freely redistribute the source code, or I can't. And if it contains SCO's copywritten code, then the GPL itself forbids me from redistributing or running it, SCO license or not.

SCO is attempting to sell you something that they can't. And that's fraud.

[ Parent ]

But (4.50 / 2) (#216)
by wij on Sat Aug 09, 2003 at 05:12:29 AM EST

If SCO should get a judgement declaring their copyright has been infringed, then we will not be able to run or redistribute versions of the linux kernel that infringe. And that's per the GPL.

SCO's license would allow you to run it, when you otherwise wouldn't legally be able to. It's not "so much bullshit".

Also, the GPL doesn't matter, you're already prohibited from distributing such copyrighted code, even if it's not licensed under the GPL.

"I am an intellectual of great merit, yet I am not adequately compensated for this by capitalism; this is the reason for my opposition to it."
[ Parent ]

-1, SCO related [nt] (3.07 / 13) (#44)
by symtry on Wed Aug 06, 2003 at 08:36:56 PM EST


- *fap* *fap* *fap*
did anyone else find this hard to follow? (1.64 / 25) (#69)
by rmg on Thu Aug 07, 2003 at 12:20:43 AM EST

this article is just a bunch of incomprehensible jibberish, as far as i can tell.

look at all the abbreviations: IBM, UCSC, FTC, AT&T, SCO, USA, etc.

the worst thing is that there is one right in the title: SCO.

what does SCO stand for? can anybody tell me?

_____ intellectual tiddlywinks

Did you read the part where I said what SCO meant? (5.00 / 6) (#76)
by MichaelCrawford on Thu Aug 07, 2003 at 12:45:45 AM EST

First, strictly speaking, the "SCO" in the name of the company "The SCO Group" doesn't mean anything at all. It is to be taken just as it is, uninterpreted. It doesn't mean anything.

However, it used to mean something. Perhaps you overlooked the part of the article where I said the following:

SCO was originally called The Santa Cruz Operation, a small father-and son consulting firm named for a beautiful small town between the mountains and the ocean in central California. The Santa Cruz Operation was once as much a bunch of freethinking hippies as any Linux hacker of today.

I can understand not knowing what UCSC means, but I did give it a link. It means "University of California Santa Cruz". I find it hard to understand that you don't know what IBM, AT&T and USA mean. And I spelled out the name of the Federal Trade Commission, I never did mention the abbreviation "FTC".


--

Live your fucking life. Sue someone on the Internet. Write a fucking music player. Like the great man Michael David Crawford has shown us all: Hard work, a strong will to stalk, and a few fries short of a happy meal goes a long way. -- bride of spidy


[ Parent ]

excuse me. (4.71 / 7) (#83)
by rmg on Thu Aug 07, 2003 at 01:45:11 AM EST

i do not read articles.

_____ intellectual tiddlywinks
[ Parent ]

hang on (5.00 / 2) (#85)
by reklaw on Thu Aug 07, 2003 at 02:01:53 AM EST

So you say it used to stand for Santa Cruz Operation. Doesn't it still stand for that?

If not, then what does it stand for now? What does SCO stand for?
-
[ Parent ]

I'm telling you, it doesn't stand for anything. (5.00 / 2) (#86)
by MichaelCrawford on Thu Aug 07, 2003 at 02:08:47 AM EST

The name of the company is "The SCO Group". The three letter word is to be taken just as it is given: SCO. The letters have no significance in themselves.

However, at one time, in Santa Cruz California, there was a Unix operating system vendor named The Santa Cruz Operation. Eventually they changed the name of the company to SCO. I suppose you could say that at that point, "SCO" still meant "Santa Cruz Operation".

But when Caldera bought the smoldering remains of SCO after everyone wiped their Open Desktop hard drives and replaced them with Linux, they moved all the servers & source code backups, and I imagine a few of the employees to Utah. They also acquired the rights to the domain name "sco.com".

At that point, because Caldera owned SCO's intellectual property, they could legally change their name to "The SCO Group", but that no longer had anything to do with Santa Cruz.

Santa Cruz is a really nice place. It was a wonderful home to me before I left to get married. You should visit, if you get a chance.


--

Live your fucking life. Sue someone on the Internet. Write a fucking music player. Like the great man Michael David Crawford has shown us all: Hard work, a strong will to stalk, and a few fries short of a happy meal goes a long way. -- bride of spidy


[ Parent ]

how very strange (4.00 / 5) (#87)
by reklaw on Thu Aug 07, 2003 at 02:11:57 AM EST

Why not rename the company to something else, or call it "Sco" instead of "SCO"? I don't get corporations sometimes.

Even if the letters don't stand for anything, the name still stands for something, I reckon. A sort of heritage, or just a brand maybe. What do you reckon? What does SCO stand for?
-
[ Parent ]

I have been trolled. (5.00 / 2) (#91)
by MichaelCrawford on Thu Aug 07, 2003 at 02:49:47 AM EST

You win sir. I resign.


--

Live your fucking life. Sue someone on the Internet. Write a fucking music player. Like the great man Michael David Crawford has shown us all: Hard work, a strong will to stalk, and a few fries short of a happy meal goes a long way. -- bride of spidy


[ Parent ]

trolled? (2.50 / 6) (#93)
by reklaw on Thu Aug 07, 2003 at 02:55:38 AM EST

I was just wondering what you believe SCO stands for.

If you don't want to be asked then, well, don't write about SCO.
-
[ Parent ]

let me congratulate you on another great thread. (3.66 / 3) (#144)
by rmg on Thu Aug 07, 2003 at 09:35:04 PM EST

of course, it's still not as good as this one, though.

that was the best thread that has come of the SCO troll to date. obviously, there is no shame in being beaten by the best.

this is a great thread nonetheless, reklaw. give yourself a big pat on the back.

and people say this isn't a good troll...

_____ intellectual tiddlywinks
[ Parent ]

well, hey... (3.66 / 3) (#145)
by reklaw on Thu Aug 07, 2003 at 09:39:37 PM EST

... you're the one that started it off here -- I was merely continuing your good work. Pats on the back all round.

Hang on.. troll? What do you mean troll? I was just trying to find out what SCO stands for. I think I've gained some real insights in this thread, actually.
-
[ Parent ]

tragically... (3.00 / 2) (#149)
by rmg on Thu Aug 07, 2003 at 09:48:06 PM EST

this defense never works.

i really wanted to know how to fix my mouse wheel, but that didn't make anyone any nicer to me. it is simply part of the k5 culture. if you ask a question, you will have to face a great deal of persecution...

oh well...

>pats back<

by the way, i have a brand new troll in the works... much more sinister than any of my previous works... it will become clear in the near future...

_____ intellectual tiddlywinks
[ Parent ]

hmm... (3.00 / 2) (#150)
by reklaw on Thu Aug 07, 2003 at 09:50:36 PM EST

... sinister? I'm intrigued.

Still, you got your mouse wheel fixed in the end. Never did find out how to make my USB cable modem work in Linux, though.
-
[ Parent ]

Just how much do you read K5? (3.50 / 2) (#96)
by kjb on Thu Aug 07, 2003 at 03:15:07 AM EST

This has been going on for quite some time, and you just figured it out now?

--
Now watch this drive.
[ Parent ]

companies = uncreative (5.00 / 1) (#139)
by horny smurf on Thu Aug 07, 2003 at 09:17:02 PM EST

There was a dilbert cartoon once where dogbert the consultant was paid big bucks to come up with a new logo... a brown coffee stain on a white piece of paper (ala Lucent).

Anyhow, I work for a 3-letter company, but the letters have no meaning whatsoever.

Originally, it was a 3-letter company (ABC), which was an acronym (All Base Company). They merged with another company (DEF), which was also an acronym (Dick Eating Fudge). After a dozen years, to end confusion with a differnet company, they changed one of the letters (DEZ), so the company name now has *no meaning whatsoever*.



[ Parent ]

hmm (5.00 / 3) (#141)
by reklaw on Thu Aug 07, 2003 at 09:27:15 PM EST

I can picture that, a company changing its name to something with zero meaning. Still, it beats having another Amazent or whatever, I suppose.

I think you've finally found the answer, you know. What does SCO stand for? Not Santa Cruz Operation, no. It stands for a lack of corporate creativity.
-
[ Parent ]

try reading it (nt) (5.00 / 2) (#77)
by Run4YourLives on Thu Aug 07, 2003 at 12:48:23 AM EST



It's slightly Japanese, but without all of that fanatical devotion to the workplace. - CheeseburgerBrown
[ Parent ]
Dude (5.00 / 4) (#80)
by kjb on Thu Aug 07, 2003 at 01:26:29 AM EST

that horse has been dead for a long time.

--
Now watch this drive.
[ Parent ]

we have an idiot. /nt (2.00 / 7) (#81)
by rmg on Thu Aug 07, 2003 at 01:44:19 AM EST



_____ intellectual tiddlywinks
[ Parent ]

Response to request (3.33 / 9) (#78)
by grouse on Thu Aug 07, 2003 at 12:49:20 AM EST

Please copy and distribute this article according to the terms of the following legal notice...
No.

You sad bastard!

"Grouse please don't take this the wrong way... To be quite frank, you are throwing my inner Chi out of its harmonious balance with nature." -- Tex Bigballs

i suppose that means... (5.00 / 1) (#187)
by fishling on Fri Aug 08, 2003 at 12:42:48 PM EST

that you aren't going to refer anyone to use his software consulting services either?

[ Parent ]
Probably not... (3.00 / 1) (#196)
by grouse on Fri Aug 08, 2003 at 04:01:11 PM EST

but the tone of that request seemed different. More like he would consider it a personal favor to do so, and I know it is something that would personally benefit him.

I feel like it is implied that Right-Thinking people ought to post this on their web site. My response is the same to SCO saying "please pay us $699 for your copy of Linux."

You sad bastard!

"Grouse please don't take this the wrong way... To be quite frank, you are throwing my inner Chi out of its harmonious balance with nature." -- Tex Bigballs
[ Parent ]

I am writing now, but to whom? (4.21 / 33) (#88)
by elenchos on Thu Aug 07, 2003 at 02:28:49 AM EST

Thank you Michael Crawford for saying what I and many other citizens of Iraq have been thinking in the last several months as the drama of the fate of Linux has unfolded before us and held us riveted to the daily developments. Although my Linux computer has not operated for the last nine weeks due to a lack of electricity, prior to the recent brown out of May-July, it ran continuously for a full two and a half years without rebooting. No Iraqi Winodoze luser can say the same! LOL.

I have my letter ready to send to my provincial or state or national law enforcement authorities, but I am at the moment uncertain which of these would apply in my case. Can anyone tell me if Attorney General John Ashcroft would be the best point of contact for me? And while you're at it, am I in a province, state, or nation? I am not aware of any provincial authority in my section of Baghdad. Generally, when I see men with guns in the street outside my house, I take them to be the provincial/state/national authority.

Yesterday the men with guns were U.S. Marines, and so I gathered my letter of complaint and was ready to present it to them. However, they left the vicinity very quickly in their humvee, and for several hours no provincial/state/national law enforcement authority was visible. In the evening some Iraqi men with guns were outside, and they shouted "We love Saddam!" while firing their AK-47's in the air.

At last! I thought. Someone is in charge. I actually was able to contact their leader and explained the crimes of the SCO executives to him. Without going into great detail, he did not seem to be sympathetic to the Iraqi Linux community, and did not wish to take action against SCO on our behalf. He also shot my neighbor's son Omar in the legs, which lead to his untimely death in the late hours of the morning.

Today there are more Marines, but they are not on my street; I can see them across the square and fear they will not stay.

Please advise who I should send my letter to. President George Bush has not answered any of my email, and I think he uses Windows anyway. The Iraqi *BSD users have all contacted UN Secretary General Kofi Annan, but I take them for fools, to be honest. Thank you, Michael Crawford! Together we will see the SCO executives behind bars.

PS: Please send me a distro that will run on an IBM Thinkpad, as I can recharge it at a friend of a friend's house for only $200 American. At least until the electricity at my house is back on.

Adequacy.org

Priceless! (nt) (2.66 / 3) (#117)
by Ta bu shi da yu on Thu Aug 07, 2003 at 08:11:41 AM EST



---
AdTIה"the think tank that didn't".
ה
[ Parent ]
I would give you Osama Bin Laden's address ... (3.50 / 2) (#152)
by pyramid termite on Thu Aug 07, 2003 at 10:07:51 PM EST

... but I'm afraid I've misplaced it. Rest assured that if I do find it, I will give it to you and he will respond in a timely and appropriate manner.

On the Internet, anyone can accuse you of being a dog.
[ Parent ]
The UNIX fire sale (3.71 / 7) (#92)
by MichaelCrawford on Thu Aug 07, 2003 at 02:55:26 AM EST

So I got to thinking, when (not if) SCO files for chapter 7, there will be a bankruptcy auction to sell of the assets, with the proceeds split among all those SCO owes money to.

Among the items sold to the highest bidder will be the intellectual property of Unix - not just the source code, but rights to the copyright, patents, disclosure of the trade secrets and everything. Except the trademark - the Open Group owns that.

But the most valuable forms of Unix are already in the hands of companies like IBM and Sun that have fully paid-up, non-revocable licenses. They've already got one. So who would want it? While it's a valuable piece of work, I would expect you'd be able to get it for pennies on the dollar.

Wouldn't it be funny if Red Hat bought up the rights to Unix and released all the source code under the GPL?

Would they have to respect any obligations that SCO had under non-disclosure? I imagine there are many companies' trade secrets to be found in the source, but I'm not really sure if whoever bought the assets at auction would be obligated to respect them.


--

Live your fucking life. Sue someone on the Internet. Write a fucking music player. Like the great man Michael David Crawford has shown us all: Hard work, a strong will to stalk, and a few fries short of a happy meal goes a long way. -- bride of spidy


Can't release it. (5.00 / 1) (#205)
by haflinger on Fri Aug 08, 2003 at 07:16:26 PM EST

Open Group (I think) holds the copyright to Unix, not SCO. All SCO, Sun, etc. hold are licenses - they have to comply with the terms of their licensing agreements, which include secrecy. Anybody who bought SCO's license in a bankruptcy sale would also have to comply with the same terms (well, until the term of copyright expired, in about 70 years' time; then it'd be public domain and they could do what they wanted).

Did people from the future send George Carlin back in time to save rusty and K5? - leviramsey
[ Parent ]
Novell (5.00 / 1) (#207)
by pdw on Fri Aug 08, 2003 at 08:32:20 PM EST

The Open Group owns the Unix trademark. Novell owns the Unix source code. SCO has bought some kind of exclusive license to the Unix source code, but the details of that contract are very unclear (both Novell and SCO keep discovering extra clauses and agreements...)

[ Parent ]
There is no "Justice Terrorism Act" (4.00 / 4) (#98)
by megid on Thu Aug 07, 2003 at 03:49:01 AM EST

Ever noticed that no current law can prevent you from terrorizing others by court trials? If I had money and my opponent had none, this would be my primary method of terrorizing him.

Until a law exists to to fix that hole, happy angst triggering, megacorps.

--
"think first, write second, speak third."

Actually RICO (5.00 / 1) (#104)
by RipCurl on Thu Aug 07, 2003 at 05:01:30 AM EST

There is, its called RICO. But you know when it comes to these kidns of things, whoever has the deep pockets is the one that can "change" the views.

[ Parent ]
Like NOW (5.00 / 1) (#146)
by mmsmatt on Thu Aug 07, 2003 at 09:42:18 PM EST

Who, until the Supreme Court intervened, used RICO to prosecute abortion protesters. This translates to a near six figure fine, some lost their homes to pay up.

[ Parent ]
don't exagerate (3.75 / 4) (#181)
by dh003i on Fri Aug 08, 2003 at 09:48:14 AM EST

The only individual's prosecuted under RICO who protested abortions were those who were acting illegally (e.g., blocking entrances, stalking people, and so-on and so-forth). Since they do collectively organize to break the law and prevent women from exercising their rights, I don't see how or why this is wrong.

Social Security is a pyramid scam.
[ Parent ]

hard to do (5.00 / 3) (#111)
by jjayson on Thu Aug 07, 2003 at 07:46:40 AM EST

It is very hard (probably impossible) to draft legislation that would prevent court abuse while not doing more harm to little companies. Almost all legislation raises the barriers while trying to help something.
--
"Fuck off, preferably with a bullet, if you can find one that's willing to defile itself by being in your head for a split second." - Parent ]
There is one (none / 0) (#130)
by ad hoc on Thu Aug 07, 2003 at 07:37:12 PM EST

but it does not apply in the case. There is an anti-SLAPP suit law. SLAPP is Stragegic Lawsuit Against Public Participation. Basically, a SLAPP suit is one that is invoked to prevent someone else from exercising their first amendment right to free speech.

But, as I say, it does not apply in this case because SCO is not trying to shut anyone up. They don't care what you say as long as you pay their extortion money.


--

[ Parent ]

I disagree (2.00 / 1) (#137)
by greenrd on Thu Aug 07, 2003 at 08:44:25 PM EST

Isn't the freedom to write code part of freedom of expression?

Isn't submitting code to the Linux kernel "public participation"?


"Capitalism is the absurd belief that the worst of men, for the worst of reasons, will somehow work for the benefit of us all." -- John Maynard Keynes
[ Parent ]

Non sequitur (5.00 / 1) (#140)
by ad hoc on Thu Aug 07, 2003 at 09:20:47 PM EST

Sorry, I don't see how either of your comments applies.


--

[ Parent ]
They are claiming to own Linux (2.00 / 1) (#165)
by greenrd on Fri Aug 08, 2003 at 01:32:39 AM EST

They are claiming that development and distribution of Linux is a violation of their IP.


"Capitalism is the absurd belief that the worst of men, for the worst of reasons, will somehow work for the benefit of us all." -- John Maynard Keynes
[ Parent ]

Backward (none / 0) (#220)
by ad hoc on Sat Aug 09, 2003 at 11:04:26 AM EST

In a SLAPP suit, it's not what the plaintiff claims that is at issue. It's what the defendant claims and suit is geared toward forcing the defendant to shut up. It's not geared toward getting a defendant to pay up.

Here is an example of a SLAPP suit. The plaintiff (ECG) is trying to use a lawsuit (or threat of lawsuit, in this case) to get StopECG to shut up.


--

[ Parent ]

Perhaps not federal, but... (none / 0) (#157)
by pin0cchio on Thu Aug 07, 2003 at 11:24:02 PM EST

Many U.S. states ban barratry, or "the act or practice of bringing repeated legal actions solely to harass."


lj65
[ Parent ]
Another approach (3.42 / 7) (#100)
by Sciamachy on Thu Aug 07, 2003 at 04:19:22 AM EST

Rather than paying the money to SCO, just buy that much worth of their shares. If enough Linux users do this, we'll own the damned company, and can vote at a shareholder meeting to sack McBride and cease SCO's barratry.
--
Fides Non Timet
I wouldn't do that myself... (5.00 / 3) (#106)
by mooZENDog on Thu Aug 07, 2003 at 06:56:32 AM EST

Just take a look at the SCO executive merrily selling their stock. They know they're in trouble (useful link, that - it's SCO's risk assessment of the litigation they have decided to persue).

--------
"An eye for an eye leaves the whole world blind"
- Gandhi

[ Parent ]
Aha! (5.00 / 1) (#129)
by ad hoc on Thu Aug 07, 2003 at 07:26:35 PM EST

SCO is a derivative of Caldera! Things become much clearer now.


--

[ Parent ]
When is their next AGM ? (none / 0) (#110)
by salsaman on Thu Aug 07, 2003 at 07:41:23 AM EST

You think they will survive that long ?

[ Parent ]
Ah, because that's what they want? (none / 0) (#116)
by Ta bu shi da yu on Thu Aug 07, 2003 at 08:07:32 AM EST

Don't you think that they're angling to be bought out by IBM? It's not like their company is going anywhere.

Let them die a slow and painful death.

Yours humbly,
Ta bù shì dà yú

---
AdTIה"the think tank that didn't".
ה
[ Parent ]

Re: Another approach (none / 0) (#128)
by r1chard on Thu Aug 07, 2003 at 07:20:31 PM EST

Not a bad ideas - buy the 1 share required to give you voting rights at the AGM, that won't have much effect on stock price, and means that if SCO is still around at their next AGM time, local linux geeks can have a party at SCO's expense.

[ Parent ]
Why would you do that? (none / 0) (#160)
by it certainly is on Fri Aug 08, 2003 at 12:57:38 AM EST

SCO has been a worthless company that nobody in their right mind should invest in for quite some time now. Their share price has gone up rapidly because dumb investors believe they might win against IBM or somehow sell "Linux licenses". You're intelligent enough to know better.

Why would you buy up a worthless stock? That's just throwing your money away.

kur0shin.org -- it certainly is

Godwin's law [...] is impossible to violate except with an infinitely long thread that doesn't mention nazis.
[ Parent ]

Interesting take. (3.00 / 2) (#163)
by RobotSlave on Fri Aug 08, 2003 at 01:16:18 AM EST

So, you figure the price movement of late is mostly due to the Linux intelligentsia picking up a few shares as insurance against all those calls they've been selling?

I mean, the momentum would sure look a lot different if they were inclined to go with an unprotected short, wouldn't it?

Well, no matter which play they use, there's an opportunity here for Linux nerds to make a killing going short. Go on, at least buy some puts— we're talking profit here!!1!

[ Parent ]

Hey Ed, (5.00 / 1) (#166)
by it certainly is on Fri Aug 08, 2003 at 01:33:29 AM EST

I'm telling you, the market just can't get enough of tulips. You'll be rich!

kur0shin.org -- it certainly is

Godwin's law [...] is impossible to violate except with an infinitely long thread that doesn't mention nazis.
[ Parent ]

Dang. (5.00 / 2) (#167)
by RobotSlave on Fri Aug 08, 2003 at 01:42:40 AM EST

I wish you'd told me earlier. I'm all loaded up on South Seas and Radio right now.

[ Parent ]
SCO Fee for embedded Linux.. (4.83 / 6) (#118)
by ignatiusst on Thu Aug 07, 2003 at 08:28:59 AM EST

SCO Fee for embedded Linux is $32.

Story here.

When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him. -- Jonathan Swift

Which Is Interesting... (5.00 / 1) (#185)
by EXTomar on Fri Aug 08, 2003 at 11:56:16 AM EST

Since most embedded systems aren't on Intel processors. Of course that doesn't seem to matter to SCO because even code that IBM had nothing to do with is now SCO's in their eyes. *rolls eyes*



[ Parent ]
Breaking news (2.75 / 8) (#123)
by arvindn on Thu Aug 07, 2003 at 10:07:25 AM EST

SCO is suing Cisco for trademark violation resulting from embedded use of the word SCO.



So you think your vocabulary's good?

Let's make them go broke... (3.00 / 9) (#131)
by r1chard on Thu Aug 07, 2003 at 07:40:45 PM EST

Why not call SCO on once or twice a day on 1-800-726-8649 to listen to their hold music.

1800 phone lines cost money to o run... typically telcos charge long distance rates, even for local calls...

RG

wonderful (4.66 / 3) (#212)
by jjayson on Sat Aug 09, 2003 at 01:50:17 AM EST

Why don't just order some pizzas to be delivered at their offices too?
--
"Fuck off, preferably with a bullet, if you can find one that's willing to defile itself by being in your head for a split second." - Parent ]
Great idea! (none / 0) (#252)
by ulrich on Tue Aug 12, 2003 at 03:30:42 AM EST



[ Parent ]
Even better (none / 0) (#280)
by unoengborg on Fri Aug 15, 2003 at 11:18:59 AM EST

Wait long enough to have a long talk with some of their sales people. If you live near any of their offices try to make them discuss it over a lunch or a dinner.

Make sure that you have a plausable business proposition. After all who can blaim you for investigating the market before buing a computer system.
GOD is REAL! Unless explicitly declared INTEGER
[ Parent ]

true software piracy! (3.50 / 4) (#132)
by treat on Thu Aug 07, 2003 at 07:48:57 PM EST

SCO continues to distribute the Linux kernel to this day under the GPL. Even in the unlikely event that their allegations are true, the vast majority of the code would be owned by other people. The license under which SCO is distributing this software owned by other people states: 4. You may not copy, modify, sublicense, or distribute the Program except as expressly provided under this License. Any attempt otherwise to copy, modify, sublicense or distribute the Program is void, and will automatically terminate your rights under this License. However, parties who have received copies, or rights, from you under this License will not have their licenses terminated so long as such parties remain in full compliance.

It would seem that SCO's attempts to license Linux under different terms would terminate their rights under the GPL. Their continued distribution of it subjects them to severe civil and criminal penalties.

The only way this would not be the case is if all of Linux is considered to be owned by them. I assume the legal system in the US is not quite this screwed up.

Continues? (4.50 / 2) (#147)
by X3nocide on Thu Aug 07, 2003 at 09:46:15 PM EST

SCO continues to distribute the Linux kernel to this day under the GPL.

Do they? I have a hard time finding any such offer from their site, but maybe they've chosen to hide it while the case rages on.

pwnguin.net
[ Parent ]

register.co.uk linked to it a few hours ago... (4.00 / 2) (#159)
by peretzpup on Fri Aug 08, 2003 at 12:51:41 AM EST

and I downloaded it.

The file was (and possibly still is) located at: ftp://ftp.sco.com/pub/updates/OpenLinux/3.1.1/Server/CSSA-2003-020.0/SRPMS/linux-2.4.13-21S.src.rpm

As you can see it is a 2.4 series kernel.  Perhaps you should download it and indemnify yourself.

[ Parent ]

the EFF (3.50 / 4) (#133)
by j0s)( on Thu Aug 07, 2003 at 07:50:51 PM EST

does anyone think that the EFF will get involved now that SCO is going after individual users for license fees. It seems like the perfect time for the EFF to step up. If they do, I'll definitely be contributing more money to them and be willing to do my part to help.

-- j0sh



Here's something helpful you can do right now: (3.00 / 4) (#134)
by MichaelCrawford on Thu Aug 07, 2003 at 08:07:18 PM EST

Please go visit SCO's Customer Feedback Form and tell them they need to read this article. Give the title - "Let's Put SCO Behind Bars" - and the URL of this page.

I just did, but lots of people are spamming the feedback form, so I want to be sure they get the message.

Extra credit: print the article out and fax it to them.

Even better: Snail mail a hardcopy to Darryl McBride's attention, or send it to SCO's attorney, David Boies. Keep in mind that attorneys can be prosecuted or disbarred for filing frivolous lawsuits for their clients.

David Boies
BOIES, SCHILLER & FLEXNER LLP
333 Main Street
Armonk, New York
10504
Telephone: (914) 749-8200
Facsimile: (914) 749-8300

Thanks for your help.


--

Live your fucking life. Sue someone on the Internet. Write a fucking music player. Like the great man Michael David Crawford has shown us all: Hard work, a strong will to stalk, and a few fries short of a happy meal goes a long way. -- bride of spidy


Ominous response (2.00 / 1) (#195)
by mikej on Fri Aug 08, 2003 at 03:49:02 PM EST

I posted the following in their customer form

"To whomever is reading this, please take a look at:

http://www.goingware.com/notes/prosecute-sco.html

Please be aware of the kind of backlash SCO's current actions are creating, and consider its effect on your personal wellbeing.  Express your concerns to your manager(s), and ask them to relate those concerns to their manager(s).  Remember that if SCO is driven into bankruptcy or out of business entirely you will be among the unemployed in an already tight job market.

Good luck, and good day."

The (ominous) result of the web form was:

"Thank you for your Feedback

You will be hearing from us soon. "

--
Ideology breeds hypocrisy. Just how much is up to you.
[ Parent ]

SCO execs cashing in on stock options (3.33 / 3) (#155)
by demi on Thu Aug 07, 2003 at 10:24:41 PM EST

Someone posted this excellent comment today, which brings to light another interesting side of the SCO saga. Seems that Darl McBride hasn't cashed in his 200,000 options plus however many held shares yet, but he's apparently not finished pumping...

I'd write my state Atttorney General, but... (3.00 / 6) (#158)
by ArtFart on Fri Aug 08, 2003 at 12:33:44 AM EST

...unfortunately, I live in Seattle. Washington's AG was one of the prime movers in the Great Anti-Tobacco Campaign, so she certainly knows how to litigate up a storm. Alas, she's also running for Governor, no doubt with a sizable chunk of support from Redmond--you know, those folks with the CEO who dances funny and thinks Linux is the work of the Devil--the only place Darl and Co. have been getting enough cash from lately to keep the lights on. Methinks if I write her, either nothing at all will happen, or I'll get some euphemism-laden form reply about how it's all about creating jobs or something.

Never an excuse to abandon democracy (5.00 / 1) (#171)
by hoggy on Fri Aug 08, 2003 at 05:48:11 AM EST

Don't write off your AG so soon. Write to her anyway. Then write to the others running for Governor. Then write to your senator and congressman.

It's wrong to believe that your voice won't be heard or won't make a difference. Every voice is heard and makes a difference. The difference you make may be very slight, but that's how democracy works. If enough people make the effort then the voice becomes loud and the difference large.

Anyone who doesn't engage in the political process has no right to complain about it.

[ Parent ]

Bravo, hoggy. (5.00 / 1) (#172)
by HermanMcGuigan on Fri Aug 08, 2003 at 06:33:36 AM EST

Political apathy is running rampant in the world these days, and it has to stop.

[ Parent ]
Latest: IBM's Countersuit (3.40 / 5) (#161)
by greenrd on Fri Aug 08, 2003 at 01:00:19 AM EST

Read IBM's countersuit here [43 page PDF].

Enjoy!


"Capitalism is the absurd belief that the worst of men, for the worst of reasons, will somehow work for the benefit of us all." -- John Maynard Keynes

Personally... (2.33 / 3) (#173)
by FotoPlasma on Fri Aug 08, 2003 at 06:46:36 AM EST

I'd much rather see Ken Ley and those Enron execs go to prison than anyone at SCO. If they want to try to enforce this license fee, then they can shove it up their asses, but how many lives have they ruined?

but how many lives have they ruined (none / 0) (#191)
by Roman on Fri Aug 08, 2003 at 02:20:18 PM EST

By going postal and filing all these lawsuits without any merit they create a situation called pump and dump, but the only people to really gain in that situation are the highest execs in the company who have too many shares. So, they are destroying that company and probably robbing thousands of people of their money. I say fry'em.

[ Parent ]
Bull. (5.00 / 1) (#201)
by RobotSlave on Fri Aug 08, 2003 at 05:04:25 PM EST

If this is really such a transparent "pump and dump," then all an average everyday non-executive person has to do to profit from it is take a short position in SCO.

I know, I know. You're a nerd, and you don't have the faintest clue as to how the stock market works, but trust me on this. If it's really such an obvious stock-inflation ploy, then it should be quite easy for anyone to profit from it. Those who don't like the risk of a naked short position can just buy puts.

Of course, it's a lot easier to cry and moan about conspiracies on a web-blog than it is to pick up the phone and call a broker, so you might want to just keep typing away furiously about your supposed SCO stock conspiracy, instead of doing something about it.

[ Parent ]

A word in your ear, Ed. (none / 0) (#229)
by it certainly is on Sun Aug 10, 2003 at 09:44:12 AM EST

I'm sure you're the biggest market-gambling hot-shot the world has ever seen. But could you do me a few favours?
  1. Don't try and "educate" people you consider market newbies with "fill your boots" advice. If anyone doesn't know you're an untrustable troll, they're likely to get burned and end up being the ones holding the bomb when it explodes.
  2. Remind yourself that SCO executives have made their shares increase in value by over 1400%. They can make a "killing". Joe Investor is already far, far too late to make such a killing.
  3. Write THIS IS NOT INVESTMENT ADVICE in your posts. This is not legal advice, but making it clear that you're not giving investment advice would be advantageous if burned market newbies came after you with lawyers and a big stick.


kur0shin.org -- it certainly is

Godwin's law [...] is impossible to violate except with an infinitely long thread that doesn't mention nazis.
[ Parent ]

A cock in your mouth, Stu. (none / 0) (#236)
by RobotSlave on Sun Aug 10, 2003 at 06:53:26 PM EST

  1. Grown-ups know they have to argue without resorting to name-calling, poopy-pants.

  2. SCO execs haven't made their shares increase in value by a single penny, Stu. The market has made those shares go up in value, and you know it as well as anyone else. If anything, the SCO execs of late have been driving the price down, because they're selling. Joe Investor most certainly can make a killing with a terminal short position, if indeed the slashbots are right and the company is doomed and the recent price runup is just the result of some impossible back-room stock-manipulation conspiracy.

  3. This is investment advice, dear. I'm not the sort of coward who gives out web-board investment advice under a great big lying "this is not investment advice" disclaimer.

Go on, Stu. Legal threats on web boards do intimidate me, ever so. Maybe you and localroger could pool your money, and get yourselves five minutes with an attorney who only reeks slightly of bourbon?

[ Parent ]

Mmm, please! (none / 0) (#239)
by it certainly is on Sun Aug 10, 2003 at 11:12:38 PM EST

  1. I don't get it. Oh, wait a minute, calling you by your name is name-calling. Ah, it makes sense. That's very logical, I never thought of it like that, you definately have something there.
  2. Have you heard of cause and effect? The Market didn't suddenly invest rapidly in SCO for a bit of a laugh, it did it in reaction to SCO's lawsuit and press releases.
  3. I'm no hot-shot like you, but it appears you are offering piss-poor investment advice -- disclaiming it would be a damn good idea. If SCO is doomed and the big investors can see it, they'll be using every uptick to sell, thus making it even less likely that there'll be another uptick. Finding a big SCOX investor willing to lend for your short at that point would be like finding Elvis on the comet Hallibop.
I'm touched that you think I'm making legal threats, Ed. Rest assured, if I actually had a financially motivated reason to track you down (e.g. if you stopped paying the alimony), you would be found.

kur0shin.org -- it certainly is

Godwin's law [...] is impossible to violate except with an infinitely long thread that doesn't mention nazis.
[ Parent ]

You're welcome. (none / 0) (#243)
by RobotSlave on Mon Aug 11, 2003 at 02:49:06 AM EST

There are plenty of SCOX shares available for anyone interested in going short right now, Stu. Try to pay attention. Short interest is less than 6% of the float, for fuck's sake.

Why are Linux nerds so unwilling to believe what the market is telling them when it comes to SCO stock? They sure seem happy about what Mr. Market says when it's, say, Netcraft statistics that are doing the talking, don't they?

Face it, if no-one at all thought the SCO suit had any merit, then the stock would have tanked, and the Linux enthusiasts smart enough to go short would be crowing over their profits today (well, those with the sense to cover, anyway).

Since that hasn't happened, however, the Linux nerds, instead of acknowledging the fact that investors by and large disagree with the FSF-zealot assessment of the situation, have decided to make up a stock-manipulation fairy-tale that doesn't stand up to the slightest scrutiny.

[ Parent ]

Oh, I get it. (none / 0) (#244)
by it certainly is on Mon Aug 11, 2003 at 07:54:41 AM EST

This is a long-winded braggard's way of saying "put your money where your mouth is".

I do hope that you've taken time off your busy trolling schedule to call up your broker and do exactly that. In which case, best of luck making yourself obscenely rich on the stock market.

kur0shin.org -- it certainly is

Godwin's law [...] is impossible to violate except with an infinitely long thread that doesn't mention nazis.
[ Parent ]

Exactly. (none / 0) (#249)
by RobotSlave on Mon Aug 11, 2003 at 06:56:00 PM EST

I won't be betting on this one, of course. I, naturally, am not convinced the case is entirely without merit. Overly aggressive, yes, but not entirely without merit.

We shall see, eh?

[ Parent ]

Well (none / 0) (#265)
by salsaman on Tue Aug 12, 2003 at 08:22:40 PM EST

According to some reports I read, there are no stocks left to borrow. It seems as if this company is being very heavily shorted already.

[ Parent ]
Read before posting, please. (3.50 / 2) (#266)
by RobotSlave on Wed Aug 13, 2003 at 12:58:40 AM EST

Come on, you can at least finish the thread and follow a link or two before you post, can't you?

There are plenty of SCOX shares out there for anyone who wants to short, no matter what the gibbering slashbot parrots are telling each other.

Short interest isn't even 6% of the float.

This old "no shares to short" is a very common myth that crops up whenever a gaggle of market newbies takes a sudden negative interest in a stock, and one of them finds no shares to short one afternoon in his etrade account, and starts inventing stupid newbie "explanations" for it, which then feed on themselves in the message boards.

It's happened tons of times before; to MSFT, to AMZN, and to plenty of other shares that have found themselves in the sites of an enthusiastic, impatient, and financially inexperienced special-interest group.

[ Parent ]

Who the hell are you anyway? (none / 0) (#281)
by Roman on Sun Aug 17, 2003 at 02:37:10 AM EST

I have TRIED to get my hands on those stocks to short them, but noone is willing to take SCO as collateral, they were considered a penny stock just before beginning of this year, so f..ck off. The market is following the trend and the hearsay, they love it when a company files a lawsuit, nevermind that this is a bullshit case.

You are full of shit anyway.

[ Parent ]
Article version for easier copying available (2.00 / 1) (#174)
by MichaelCrawford on Fri Aug 08, 2003 at 07:52:57 AM EST

If you tried to copy the HTML source of the above article, you would have found that Scoop does horrible things to the markup, for example inserting a <font> tag into every paragraph as well as lots of extraneous <p> tags.

I have a copy available at my own website which I deliberately made very simple in order to facilitate copying. So if you want to copy this article to your own website, I recommend grabbing:

The page doesn't depend on any external files like images or stylesheets to be displayed properly. It uses very simple, straightforward and valid markup. It even looks good in lynx.

Thanks for your help.

Mike


--

Live your fucking life. Sue someone on the Internet. Write a fucking music player. Like the great man Michael David Crawford has shown us all: Hard work, a strong will to stalk, and a few fries short of a happy meal goes a long way. -- bride of spidy


Look at the facts.... (3.50 / 2) (#176)
by The glass is half full on Fri Aug 08, 2003 at 08:46:45 AM EST

The SCO group launched frivilous unsubstantiated lawsuits which did what? The clueless fund managers bid their stock up. Go to the SCO web site and look under SEC filings. The executives are doing two things, dumping shares at full price and buying additional shares at pennies on the dollar. This is nothing more than a scam to enrich the executives. The evidence is posted right on their web site. As stated elsewhere, this is nothing more than "legal terrorism" which is unfortunately how the law works in America. Whomever has the most money always wins (cough cough O. J., cough cough Micro$oft). I doubt under the Bush administration that anything will happen although they ARE manipulating stock, filing FALSE legal documents and interfering with commerce. They (executives) will end up filthy rich and the poor suckers who work for SCO will become unemployed soon enough.

Put your money where your mouth is. (5.00 / 1) (#199)
by RobotSlave on Fri Aug 08, 2003 at 04:52:58 PM EST

Go on. If it's such a scam, then borrow a couple grand from your parents, call a broker, and go short.

If this is really just a "stock scam," then the smart thing to do is make some money off of it, don't you think? All you've got to do is sell SCO short. Or buy puts. Or sell calls.

Come on, what are you waiting for?

[ Parent ]

Read the financial boards, please (none / 0) (#203)
by sphealey on Fri Aug 08, 2003 at 06:00:22 PM EST

Go on. If it's such a scam, then borrow a couple grand from your parents, call a broker, and go short.
You might want to check the financial boards before making a post like this. In order to sell short, there has to be someone (typically a brokerage) willing to take the other side of the trade. Since the storm really broke around 1 July, there has been virtually no one willing to do so with SCOX. Schwab accepted a few thousand shares short last week, everyone on Yahoo jumped on it - result was no more shorting.

When the major brokerages refuse to accept short sales, I think that tells you something about the expected direction!

sPh

[ Parent ]

'The financial boards?' (none / 0) (#204)
by RobotSlave on Fri Aug 08, 2003 at 06:49:58 PM EST

I take it by that you mean "Yahoo! Finance?"

Please.

You might want to check with reality before making a post like that. The Yahoo! den of trolls and foaming conspiracy nuts is probably the last place I'd ever go for market information, particularly for a stock that's been all over the news recently.

There are plenty of recent messages on the net reporting successful SCOX shorting. They tend to be brief, so you might miss them if you're only reading the sort of long ranty conspiracy theory posts that slashbots might link to.

There are some brokerages that don't have shares at all, of course, and most don't always have shares, but investors who have accounts with more than one brokerage aren't having much trouble getting shares to short.

This isn't the first time a groups of ardent but inexperienced investors have propagated a "no shares to short" myth, and I'm sure it won't be the last, either.

[ Parent ]

short interest (5.00 / 1) (#211)
by jjayson on Sat Aug 09, 2003 at 01:45:14 AM EST

NASDAQ reports 391,346 shares short at the end of July with a avg daily volume of about 200,000, so about 2 days to cover. The float is about 13 million shares. That's drops. However, the short interest did rise 40% last month. So maybe there was some liquidity problems, but I can't imagine there not being enough shares around.

I wonder how much naked activity there has been?

Oh well. Yahoo, Raging Bull, Fool, etc... are all worthless.
--
"Fuck off, preferably with a bullet, if you can find one that's willing to defile itself by being in your head for a split second." - Parent ]

Exactly. (5.00 / 3) (#217)
by RobotSlave on Sat Aug 09, 2003 at 07:46:23 AM EST

I mean, come on. Short interest is only 5% of float?

No, it's pretty clear the Linux zealots are acting exactly like any other market-newbie cult that's taken a sudden negative interest in a given stock.

I realize the average neophyte investor tends to have no sense of history, as in "the past hundred years or so," but these newly-minted anti-SCO Linux-bleating crusaders haven't even digested the past five years, yet.

It's just sad, really.

[ Parent ]

Too late (none / 0) (#279)
by unoengborg on Fri Aug 15, 2003 at 11:07:45 AM EST

To make money on the SCO scam you should have jumped on it from start. Even though McBride et al have bin very good at getting out stock pumping press releases, lately they have started to sound a little strained. Now I would say it is too risky.
GOD is REAL! Unless explicitly declared INTEGER
[ Parent ]
read this! hilarious! ;-P (4.50 / 2) (#197)
by circletimessquare on Fri Aug 08, 2003 at 04:28:34 PM EST

http://www.perlguy.net/sco.html

The tigers of wrath are wiser than the horses of instruction.

Gosh Darnit... (3.00 / 1) (#198)
by SPYvSPY on Fri Aug 08, 2003 at 04:38:55 PM EST

...as if K5 isn't slow enough, you have to put a freakin' SCO story on the front page and practically beg for a slashdotting.
------------------------------------------------

By replying to this or any other comment in this thread, you assign an equal share of all worldwide copyright in such reply to each of the other readers of this site.

Unlikely anyone will go to prison (3.33 / 3) (#214)
by slashcart on Sat Aug 09, 2003 at 04:02:59 AM EST

The guys at SCO are unethical but not stupid and they're not doing anything that could possibly land them in prison. Thus far they've not demanded money of anyone; they sent letters to 1,500 companies adivisng them to "consult with their attorneys" about the desirability of purchasing a license. Furthermore, they haven't said they're going to sue end users, thus far. They've only suggested that they are looking into it. They insinuate without making outright statements, they offer licenses but don't demand payment, they suggest they might sue end users but haven't actually done it. SCO is walking a fine line here. They carefully avoid doing anything criminal. I doubt what they've done is extortion.

SCO has made extremely damaging and possibly unsubstantiated claims about Linux and IBM. What SCO has done may very well be against the law, but only against civil (not criminal) law. As such IBM will sue the shit out of them and take all SCO's money, but all IBM can get from SCO is its money. The execs at SCO are very likely immune from liability in all this.

Unfortunately these lawsuits may actually represent a wise business decision on SCO's part. You may think they have only a slight chance of prevailing in these lawsuits. But what are their chances of prevailing in the marketplace by selling SCO unix? Practically zero. This is their best chance. Even if IBM sues the crap out of them, they have very little to lose. The company has a cash store of only $10m and was doomed anyway.

But sir, I didn't know illegal drugs were illegal! (4.00 / 2) (#215)
by wij on Sat Aug 09, 2003 at 04:51:32 AM EST

IANAL (Which is a disclaimer that I suspect you should have put in big bold letters at the top of your article.)
Even if SCO's claims are true, it is not a violation of their copyright for me to possess a copy of their code. Instead, any copyright infringement was committed by the vendors who supplied me with the Linux distributions I use.
Even if it's not your fault that you acquired infringing software, then that doesn't mean that you get of scot-free if SCO is right. You either have to destroy your infringing linux installation or acquire a license to make it legal, and that would entail giving $699 (or $1399 if you decide to take your chances) to SCO.

Furthermore, if you ever did distribute a copy of linux, for instance, if you burned an infringing install CD for a friend, then that makes you a "vendor", and liable for the same things that Red Hat is. That could have enormous consequences in and of itself. The legal liability isn't concentrated at the top, like with most software, its spread thought the distribution network.

My response is that SCO is guilty of criminal fraud and extortion. I didn't violate SCO's copyright or acquire their trade secrets through any illegal means, and it is fraud for them to claim that I did. It is extortion for them to tell me I must pay them money to avoid a lawsuit.
Your claims of victimhood are overblown and probably bogus. If SCO's claims are true, and you continue to use an infringing installation without getting it licensed, then you're just like someone using a pirated copy of Windows XP. If the code in question is found to be SCO's, then you must abide by SCO's licensing terms to use it.

"I am an intellectual of great merit, yet I am not adequately compensated for this by capitalism; this is the reason for my opposition to it."
You missed a minor point... (3.33 / 3) (#262)
by jtown@punk.net on Tue Aug 12, 2003 at 06:41:03 PM EST

Even if it's not your fault that you acquired infringing software, then that doesn't mean that you get of scot-free if SCO is right. You either have to destroy your infringing linux installation or acquire a license to make it legal, and that would entail giving $699 (or $1399 if you decide to take your chances) to SCO.
You've described an either/or situation but we don't have an either/or situation. SCO won't tell anyone what to destroy. I hate analogies but here's one.

Your buddy Bill gives you a bunch of books. Some guy you've never met before puts a notice on the school bulletin board saying that Bill stole some of his books. "Anyone who received any books from Bill in the past two months needs to pay me $74.99 per book. If you don't pay by the end of the month, the price goes up to $99.99 per book."

Does that make any sense at all? Neither does SCO's behavior of late. The logical approach would be for the guy to say "I have reason to believe that Bill stole my Chem and Stats books. If you received any chem or stats books from Bill recently, please contact me." The logical approach for SCO would be to tell the world what was stolen. It won't hurt their case against IBM at all.

[ Parent ]

A contract is a contract (4.00 / 1) (#278)
by unoengborg on Fri Aug 15, 2003 at 10:57:12 AM EST

Your "But sir, I didn't know drugs was illegal" analogy applies more to SCO than to the end user. For years Caldera(now named SCO) enhanced and distributed Linux under GPL, thereby giving users the right to freely run redistribute the software. Some of their employees where among the most frequent contributers to the Linux kernel. Then they buy the right to sell SCO licenses from Novell. By doing so they get access to the SCO code. They continue to sell Linux under GPL for considerable time (about a year I think). They also find some SCO contracts that may prohibit IBM to freely submit some IBM IP to Linux. By doing so IBM broke trade secrets. For that IBM may need to pay damages to SCO. That is what the IBM lawsuit is all about. But it is still IBM IP, that IBM legally can submit to Linux even though it might cost them $$$$. IBM can't even change their minds, as GPL cant be revoked just because IBM finds the damages to SCO too expensive. SCO now sues IBM for breaking the contract and revealing trade secrets. After that SCO continues to sell Linux under GPL for over a month, and tells press that the lawsuit has no impact on free software. Because of this there was no reason for a SCO Linux customer to believe that the GPL licence accompanying SCO Linux products was invalid. After all if you buy windows XP from Microsoft, you don't expect them to contact you a month later to tell you that you now have to pay additionally $699 because the MS stock price is falling. Given that the main product of SCO in resent years was Linux, and that they had acces to the SCO Sys V code at least long enough to find that they had a contract problem wiht IBM, there is no way for them to claim that they unknowingly sold a pregnant cow. And as such they have to honer their contracts. They can't say "But sir, we didn't know" Of course SCO may think they own some other IP than the IBM/Sequent stuff that is the only problems that have bin hinted to the press so far. But if they don't tell what it is they will have a very hard time selling licences for it. They certainly cant sell licences to GNU/Linux as it is not theirs to sell. They can sell licences to whatever part of Linux they own nothing else. But unfortunately for them this makes the rest of Linux unlicenced according to GPL. And means that every SCO Linux licencee needs to replace a couple of million lines of Linux code to become legal.
GOD is REAL! Unless explicitly declared INTEGER
[ Parent ]
Nonsense (none / 0) (#282)
by Arker on Mon Sep 22, 2003 at 11:13:25 PM EST

Even if it's not your fault that you acquired infringing software, then that doesn't mean that you get of scot-free if SCO is right. You either have to destroy your infringing linux installation or acquire a license to make it legal, and that would entail giving $699 (or $1399 if you decide to take your chances) to SCO.

Bullshit.

There are several books out there whose authors have been sued by the author of Harry Potter. If you have one of those books, are you doing anything illegal? Do you have to buy a license or destroy the book? Of course not.

If you have a copy of MS-DOS 6 laying around (like I do) you have code illegally expropriated and sold by Microsoft. This case was fought, and Microsoft lost, years ago - so there's no doubt that it is indeed copyright infringement here, just as SCO claims exists in the Linux kernel. Does that mean I'm in violation of the law by having this disk? No it does not. MS committed the crime, MS had to pay for it, the end users have no responsibility whatsoever for that act of copyright infringement.

In the unlikely even that SCO ever comes up with an actual instance of copyright infringement here, the only legal problem for the end user will be the GPL, not SCOs copyright. The people in legal trouble over that hypothetical and unlikely case would be those who put the code in the kernel, no one else.



[ Parent ]
i have another idea (3.33 / 6) (#218)
by wji on Sat Aug 09, 2003 at 07:47:43 AM EST

why don't we all write the minister of the interior asking for him to give you a bag of fucking candy. do you people not have any idea of how government works?

In conclusion, the Powerpuff Girls are a reactionary, pseudo-feminist enterprise.
You had another idea, it was wrong. (none / 0) (#261)
by ajs on Tue Aug 12, 2003 at 05:25:19 PM EST

why don't we all write the minister of the interior asking for him to give you a bag of fucking candy

Good point. There are only 5 basic problems with that analogy:

  • Writing to your AG will help to focus the attention of those who can affect change
  • "asking [for] a bag of ... candy" is not the same as giving your AG the details of a crime of fraud.
  • It's your AG's job to hear complaints of fraud and extortion by companies to large numbers of their citizens and respond with legal action
  • The fraud in question has already been posed to the courts by Red Hat which called this "a potential securities fraud", and last I checked threatening someone with a lawsuit in order to raise your stock price and then dumping your stock because you know you can't win was both fraud and extortion.
  • Your statement embodies several logical fallacies including: Ad Hominem, Appeal to Ridicule, and Straw Man.
Enjoy.
-- Aaron Sherman <ajs@ajs.com>
[ Parent ]
wow man (5.00 / 1) (#264)
by wji on Tue Aug 12, 2003 at 08:04:50 PM EST

i didn't even bother to use capitals and you're linking to websites about logical fallacies.

it'd be entertaining to see how long we can keep this up.

In conclusion, the Powerpuff Girls are a reactionary, pseudo-feminist enterprise.
[ Parent ]

Licensing (2.66 / 3) (#224)
by Peaker on Sat Aug 09, 2003 at 06:55:51 PM EST

People get quite confused by the concept of "license" and software license, due to the EULA's that companies put on their software.

When you legally get a copy of some information (software or other), then you can do with it whatever you wish, except for distribution.

It doesn't matter if the EULA of the software tries to forbid you from making fair use of your copy, from copying it for backup purposes, or from generally using it - the license cannot forbid any fair use.

Actually, in general, a software license (not an actual agreement that you actually signed before getting the software) cannot forbid anything that copyright law doesn't already forbid. Its quite the other way around - licenses are there to allow things that copyright does not allow.

So if I have a legally aquired copy of Linux - then I need not get a license to do anything with it. The GPL does not forbid using the code if it is linked to non-GPL code (it cannot forbid anything, remmember?). The GPL allows you, despite the fact copyright does not, to redistribute the software as much as you like as long as you keep the source open and unlinked to anything non-GPL.

Let's Put SCO Behind Bars | 282 comments (231 topical, 51 editorial, 0 hidden)
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