Judge: Site must delay copying of broker reports

Mar 19, 2010 By LARRY NEUMEISTER , Associated Press Writer

(AP) -- Settling a copyright dispute closely watched in the financial news industry, a judge on Thursday ordered a Web site to delay disseminating the stock recommendations of financial services firms long enough so that the firms can alert their clients first.

U.S. District Denise Cote ruled that Theflyonthewall.com Inc. must wait to publish the financial recommendations of Barclays Capital Inc., Bank of America Corp.'s Merrill Lynch & Co. and Morgan Stanley Inc.

"Fly's core business is its free-riding off the sustained, costly efforts by the firms and other investment institutions to generate equity research that is highly valued by investors," the judge said. She said the company did no equity research of its own.

A lawyer for the company did not immediately return a call for comment.

The financial companies in 2006 sued the New Jersey corporation for copyright infringement and misappropriation, citing Theflyonthewall.com as the most systematic and egregious of the unauthorized redistributors of their reports, the judge wrote.

Cote said the online subscription newsfeed that boasts it provides "the most comprehensive database of analyst trading calls, events, and syndicate information on the Web" must now wait to report the firms' recommendations until 30 minutes after the stock exchange opens, or wait for two hours if the reports are initially released while the market is open.

In her lengthy written decision, Cote rejected the company's argument that it now publishes the recommendations only after they have become "public" and free for the taking because they emerge through other media, chat rooms, "blast IMs" or other sources.

"The fact that others also engage in unlawful behavior does not excuse a party's own illegal conduct," Cote wrote.

She noted that at least one mainstream publisher of financial news has said it is watching the litigation against Theflyonthewall.com closely and will adjust its practices based on the outcome of the litigation.

The judge said the firms have shown that the early distribution of their recommendations by others had contributed to the loss of incentive to generate reports on companies, causing them to cut their analyst staffs and budgets significantly in the last five years.

Competitors of Theflyonthewall.com include Briefing.com, StreetAccount.com, TTN, StreetInsider.com, TheStreet.com, Midnight Trader and Jagnotes.com, the judge said.

Cote wrote that it will be up to the financial firms to make sure other companies are not also publishing the recommendations before they can distribute them to their customers.

If the firms fail to take reasonable steps to stop the systematic, unauthorized misappropriation of their recommendations by others, Theflyonthewall.com can apply in a year to modify or vacate the judge's order, Cote said.

Explore further: Digital dilemma: How will US respond to Sony hack?

5 /5 (1 vote)
add to favorites email to friend print save as pdf

Related Stories

Green firms rewarded by financial markets

May 29, 2008

When a company improves its environmental performance, it is common to think that the accompanying economic improvements are based on the company's more efficient use of resources. However,

Firm location determines equity issuance

Jun 24, 2008

[B]Seasoned equity offerings less common for rural firms[/B] A new study in the journal Financial Management reveals that firms in rural areas are less likely to issue equity than firms in urban areas. In addition, rural firm ...

The future of private equity

Nov 16, 2009

Although global private equity markets have fallen on hard times, reports of their imminent demise are greatly exaggerated. So says Steve Kaplan, a widely recognized authority on entrepreneurial finance and corporate governance ...

Recommended for you

Digital dilemma: How will US respond to Sony hack?

Dec 18, 2014

The detective work blaming North Korea for the Sony hacker break-in appears so far to be largely circumstantial, The Associated Press has learned. The dramatic conclusion of a Korean role is based on subtle ...

UN General Assembly OKs digital privacy resolution

Dec 18, 2014

The U.N. General Assembly has approved a resolution demanding better digital privacy protections for people around the world, another response to Edward Snowden's revelations about U.S. government spying.

Online privacy to remain thorny issue: survey

Dec 18, 2014

Online privacy will remain a thorny issue over the next decade, without a widely accepted system that balances user rights and personal data collection, a survey of experts showed Thursday.

Spain: Google News vanishes amid 'Google Tax' spat

Dec 16, 2014

Google on Tuesday followed through with a pledge to shut down Google News in Spain in reaction to a Spanish law requiring news publishers to receive payment for content even if they are willing to give it away.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.