Microsoft Shown Involved with Baystar and SCO 269
baryon351 writes "Back a few years ago, when SCO looked like it was hemorrhaging cash, a surprise investment came out of the blue from venture capitalists Baystar. They invested $20 million in SCO and aided their anti-Linux cause, enabling McBride & co. to continue with (now shown incorrect) claims of line-by-line code copying of SCO IP in Linux. Now one of IBM's submissions to the court reveals Microsoft was behind it after all. Baystar's manager says about Microsoft's Richard Emerson: 'Mr. Emerson and I discussed a variety of investment structures wherein Microsoft would backstop, or guarantee in some way, Baystar's investment ... Microsoft assured me that it would in some way guarantee BayStar's investment in SCO.' Despite the denials about their involvement, Microsoft helped SCO continue this charade — and on top of that halted all contact with Baystar after the investment, reneging on their guarantee."
Surprise (Score:2, Interesting)
We've been saying that for a long time... (Score:5, Interesting)
No matter if SCO loses as they should, the millions of dollars their phony lawsuits cost others, the doubt they cast over all of 'free' software, and the delays in some companies considering a move to Linux until Vista could finally be made (allegedly) viable, definately helped Microsoft.
Hopefully there will be enough of a tie-in for Microsoft to be pursued for their part in the charade.
--
Tomas
My firm only uses BSD. (Score:2, Interesting)
While we now know that the claims involving the Linux kernel source code origins were likely baseless, there was a point when there was much uncertainty. Thankfully, we avoided that via our use of FreeBSD and NetBSD.
Likewise, we now see that Microsoft had wasted money with these shenanigans, money that could have been used to improve their software products. We would never even consider using their products.
Had we been a UnixWare and OpenServer shop, we'd likely be facing much uncertainty right now.
We have found that using community-developed software is often our safest bet. And best of all, we can contribute back the modifications we make.
Re:Surpise? (Score:4, Interesting)
Re:Surprise (Score:5, Interesting)
Actually... (Score:5, Interesting)
submitted as testimony/evidence in a Civil Trial- IBM is not wont, unlike MS and SCO to fabricate
things for the court (Both of the latter mentioned companies are VERY guilty of that!)...they don't
HAVE to...). A paper trail.
We see glimpses of it floating about on the Internet, if you know where to look. Not as much
of a libel or fiction as you'd like to believe.
IS it illegal (Score:3, Interesting)
I suspect so... (Score:5, Interesting)
for going after each and every party involved with this charade for it's worth. I'm hoping so
myself- it'd be nice to see all the people responsible for this whole lame affair being pilloried
for their efforts.
Afraid so... (Score:5, Interesting)
be an effective monopoly under those acts in a Findings of Fact from a prior Antitrust Trial, with
really no change in the circumstances, they're at violating the law again. (Small surprise that-
with nothing but slaps on the wrist, they really don't have any incentive to NOT do it again and
again, with more flagrant violations of the law being done over time.)
Re:It's a shame ... (Score:5, Interesting)
Oh, and the documentary evidence that already corroborated this story.
Mike Anderer (the person behind SCO's ludicrous claims that 'spectral analysis' showed that there was lots of Unix code in Linux) was drunk late one night and fired off a stroppy, and semi-literate, email to his paymasters complaining that HE was the person who convinced Microsoft to tell Baystar to pump SCO full of cash, and that he deserved a bonus for it. This email ended up on Eric S Raymond's desk, back when our Eric was the hotline for disgruntled Microsofties with incriminating internal documents to share.
Read all about it here [catb.org]
Re:The court were right about one thing (Score:3, Interesting)
Re:There's Evidence, and then there's Clear Eviden (Score:5, Interesting)
Re:It's a shame ... (Score:3, Interesting)
Nevertheless, if you lie in court you can certainly be done for perjury.
Rich Emerson Corpus (Score:5, Interesting)
Microsoft issued an relatively unusual press release in mid-September 2003, announcing that Emerson was leaving to "spend more time with his family". The announcement got published in the New York Times, and Emerson's supposed end date was August 31, 2003. He would consult on "complicated transactions".
Emerson's position as "SVP Corporate Development" reporting directly to Steve Ballmer was abolished on his resignation, and the Corp Development division demoted to supervision by the CFO. After a period, Brian Roberts, Emerson's long time deputy was promoted to run the division. Robert's left Microsoft in 2005 to work with Emerson at his new position at Evercore Partners. Roberts and Emerson have been associated since running telecomunications portfolio in the dot-com days at the investment bank Lazard-Freres.
Emerson made political contributions to the Bush re-election campaign in mid-September 2003, and listed his occupation as Microsoft Executive, so his August 2003 resignation is a bit atmospheric or conveniently backdated.
Emerson had been given a 12 Million dollar loan as a signing bonus to MSFT in 2000. A mid-September 2003 proxy noted that he was paying the loan back with vested stock options. The options were underwater, but had a positive Black-Scholes valuation based on their future potential to be profitable. Emerson used this positive valuation to retire the loan on a cash free basis.
Emerson had little public trace through most of 2004, and then acquired a position at Evercore Partners, a mergers and acquisitions investment advisor. Evercore has since IPO'd, and is traded as EVR.
Emerson and a Baystar principal Andrew Farkas were both listed as advisors/investors in a NYC Venture, I-Hatch Partners. A Farkas relative (Younger brother, I believe) is the fund executive. This is good evidence that the Baystar and Emerson relationship had alternative means of communication, and unreturned phone calls from MSFT headquarters should be considered a convenient fiction.
Emerson and deputy Roberts also show up in July 2003 SEC documents as the signatory for the Microsoft investment in IMMR (Immersion) that had patent suits against Sony and MSFT. The MSFT stock investment in IMMR ended the Microsoft portion of the suit (for game controllers) while ensuring the suit against arch-rival Sony would continue. This "investment in a strategic lawsuit" has echoes in the Baystar Pipe deal occuring just months later. We can conclude that the IMMR and SCOX investments are implementations of a similar strategic idea. Sources:1 19312503051346/ddef14a.htm [sec.gov] 0 3E6DB103AF933A1575AC0A9659C8B63 [nytimes.com] t y=SEATTLE&st=WA&;last=EMerson&first=RICHARD [newsmeat.com]
http://news.com.com/2100-1022_3-5079594.html [com.com]
http://www.sec.gov/Archives/edgar/data/789019/000
http://query.nytimes.com/gst/fullpage.html?res=95
http://www.newsmeat.com/fec/bystate_detail.php?ci
Re:Suspicions Confirmed (Score:4, Interesting)
It's probably worth noting that individual traders in financial services companies often have a shocking degree of independence, to the point that the lack of oversight has to be classified as negligent on the part of the company. There are several centuries-old banks which have gone under due to the irresponsible trades by a single trader who managed to aquire star status on the inside, usually by getting away with a couple of extremely risky trades in the first place.
It's not at all impossible that someone star-strucked by Microsoft and tempted by the potential of getting a risk-free deal may have accepted some bogus handwaving that they don't want a paper trail or whatnot, or simply might have been too intimidated to push.
Royal Bank of Canada (Score:4, Interesting)
They invested $30M in Baystar.
http://www.linuxinsider.com/story/33529.html [linuxinsider.com]
Re: VC lawyers (Score:3, Interesting)
If you went, and didn't see the link to the pdf of IBM's memo, you are incompetent. If you went and found it and checked it out, then you are mis-representing IBM's memo as Pamela Jones' interpretation of the case, which is false (who wants a liar for a lawyer? VCs, I guess.) If you didn't go to check, then you are not only arrogant, but grossly negligent and your VC clients deserve you. So are you (a) incompetent, (b) dishonest, or (c) negligent? Please go volunteer your services to MS and SCO or maybe get into patent law.
By the way, isn't VC treatable with penicillin?
I'll tell you why M$ is doing this.... (Score:1, Interesting)