I haven’t posted anything about this before on the grounds that I didn’t really have anything to add to what appears to be one of the biggest scams of all time. Then, while tidying up, I read an article in SD Magazine that had a new angle on the whole episode.
The article is available online, but you will need to register (free). The part of the article that caught my eye was a bullet list following a quote from the Salt Lake City SEC office boss, Kenneth Israel, that was first published in a Forbes article by William P. Barrett. That quote was simple: “There is a lot of fraud here per capita.”
The list can be summarised as follows:
- David Boies’ law firm joins a partnership in which they received $1M & 400,000 SCO shares. They make the most if the stock rises and the parties settle (though it seems highly unlikely that IBM will settle at the moment).
- Before the lawsuit SCO stock was hovering around the $1 mark; since then it has been as high as $22 (though it is only $8.71 at the time of writing), and they’ve issued 300,000 new shares at a par value of $0.0001 (yes, 1/10 of a cent).
- Several SCO officers have sold large quantities of stock, and also received new options to buy the stock at that $0.0001 price. Could this whole lawsuit simply be a new take on the classic “pump & dump” scheme?
- Finally, SCO used some of the new stock to buy another company, Vultus. So what? Well, Vultus was founded by the Canopy Group who also founded Caldera, the company that became SCO. They share a board member too: SCO Group Chairman Ralph J. Yarro III was a board member at Vultus. Conveniently, they were also located in the same office building as SCO before the acquisition.
The blueDonkey.org Executive Ratings for SCOX doesn’t have many votes at the moment, but they are all negative!