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Some of the smart money is getting out. Integral Capital Partners just filed an amended S-13G showing that they no longer own any SCOX. They were one of the largest holders prior to the lawsuits.

ICP is one of the smartest private investors in California. My advice on news... watch what they do, not what they say. On news sources: best source is EDGAR.

Red Hat, by the way, is a steal at its current 12.81 price, but I got in at 10.70.

Have a nice day.

This is why we must consider: who had something to gain from the disasterous crimes of September 11th? Obviously not Osama Bin Laden, who would net no financial windfall from the destruction of the World Trade Center and the Pentagon. Although he has loudly applauded the "terrorist" acts of September 11th and even tacitly taken credit for them, there is no reason to believe that he is anything more than a bandwagon jumper. Being blamed for the destruction of the World Trade Center has done more for his image than any amount of militant Islamic rhetoric.

But if not Bin Laden, then who?

It so happens that on December 11th, "coincidentally" 2 months after the tragedy, Credit Suisse First Boston quietly agreed to pay out US$100 million in order to settle an 18 month old investigation into its handling of certain high-profile technology IPOs (Initial Public Offerings). One of the most controversial amongst these being the IPO of VA Linux Systems, Inc. (LNUX) .

VA Linux Systems, Inc., now known as VA Software, is widely derided as a poster child of the dot-com bust, though inexplicably still in business. At the time of the IPO, VA Linux (Software) shares opened trading at nearly 10 times their $30 offer price, closing the first day of trading at $239.25. This meteoric rise made many early investors rich, strangely on account of a company which purports to sell a hobbyist operating system which can be obtained for free on the Internet. "The VA Linux initial public offering is a prime example of market manipulation in an IPO by investment banks, their customers and the issuing firm," said Steven Schulman, a partner in the law firm Milberg Weiss Bershad Hynes & Lerach, which specializes in filing shareholder suits.

"Because certain favored customers of the investment banks agreed to buy shares in a new issue at inflated prices in the aftermarket (in return for getting an allocation of the shares at the initial offering price) the share prices to which the IPO eventually soared were actually driven by artificial market forces," continues Schulman.

But what does the VA Software (Linux) IPO have to do with the attacks on September 11th, and what has that to do with the Credit Suisse settlement? Well, considering that VA Linux (Software) got CSFB into trouble in the first place, it stands to reason that the VA Linux (Software) Board of Directors were complicit in the stock fraud from beginning to end. As the investigation progressed against CSFB, the unscrupulous VA Software/Linux executives, their pockets bulging with filthy lucre plundered from trusting, hard-working investors, must have realized that their days in the country club were numbered if the SEC discovered their wrongdoings.

The SEC, or Securities Exchange Commission, is a federal regulatory agency, and cannot be bribed. Therefore, with a possible stint in federal prison looming large, Larry Augustin and the rest of the crooks, including outspoken gun violence advocate Eric S. Raymond, decided to undertake more active means to halt the investigation.

The Plan

It so happened that all the evidence in the CSFB/VA Linux investigation was held at the SEC Northeast Regi

http://www.sec.gov/Archives/edgar/data/1102542/000 110465903023055/a03-4160_1ex10d1.htm
And if you'll notice, RBC but in $30 mil, or 60% of the investment.

I don't think we know that yet. The S1 hasn't been filed yet.

Probably a resale S-3, since filing an S-1 would defeat most of the purposes of doing a PIPE. Anyway, the 8-K announcing the deal is out now, so you can go ahead and peruse the transaction documents, which are attached as exhibits. On a very quick look, it seems that it's definitely not a toxic PIPE, because the conversion price is fixed subject only to some anti-dilution adjustments that don't indicate "toxicity" (i.e., there's protection against normal company distributions like stock splits/stock dividends and, interestingly, company distributions to shareholders of convertible securities).

btw, I'm not sure why be2weenthelines calls these convertible preferreds "basically call options." They're not anything like call options: they're stock with liquidation preference, preferred dividend, and antidilution protection that's convertible into common stock. Their price is based on the fact that they are equity with those nice extra features tempered by their illiquidity (they're unregistered securities PLUS they're preferred stock, so if something goes horribly wrong and they're somehow stuck with the preferred, even when they can eventually sell it per rule 144, they wouldn't be able to) and risk.

Remember that illiquidity is such a big deal that the most important element of a PIPE is the registration for resale of the purchased securities; generally the purchaser will sell (in a common stock PIPE) or convert and sell as soon as the resale registration statement is effective. But while Baystar waits for the S-3 to be filed, it can't do anything with its convertible preferred. That is, I think, why Baystar got preferred stock instead of common; if SCO goes down the tubes while Baystar waits for registration, at least it gets its liquidation preference. I'm pretty sure, though, that it will convert as soon as the S-3 is effective.

It is also backed up with the way they fought against full-disclosure and bundling patches / advisories several years ago. A year later, the bundled patches were spun as a reduced number of vulnerabilities/advisories.

Everyone except the average stockholder knows it's over for Microsoft, especially as it's customers are figuring out that, despite bleatings from the marketing teams, Windows is not ready for the Internet. The bad reputation they've worked so hard to earn in the tech community is now starting to spread to the general public.

To get dates of insider stock sales, go to the SEC site and go to the EDGAR links.

Then, just pop over to the SCO company site for their press releases announcing various and sundry things that can be expected to increase stock prices.

Draw your own conclusions. You should find some. . . interesting coincidences.

Fixed URL

The worse that could happen is that they fold, maybe less of a loss to these guys than you think..

No, the "worst" that can happen is they get busted for running a pump and dump scheme by the SEC. Not to mention corporate fraud, insider trading and god knows what else; I'm sure there are a variety of charges that could be leveled if it turns out they were intentionally misleading investors for personal gain. This is serious stuff; this is not just slap on the wrist territory. We're talking some real prison time here.

If these allegations by SCO do all turn out to be completely false (as is likely), and it does turn out that SCO knew it (50/50 - I think it's just as likely they're just totally clueless), then the SEC will have to get involved in order to send a message to the rest of the corporate world that this sort of thing cannot be tolerated. If SCO execs actually succeed in taking a failing company and turning it into a personal gain for them through fraud, there will be no end to these sorts of actions by other executives at other failing companies in the future.

While MS is operating at a loss in an effort to gain market share in the gaming console industry, they are FAR from crushing Sony. Sony expects to have sold 3-4 times the number of PS2s to XBoxes this fiscal year (source).

Furthermore, MS is going to have a hard time crushing a company that brings in double it's revenue (Sony revenue in yen MS revenue), so if it comes down to a battle of who can sustain operating at a loss longer Sony has a decided edge.

Regardless, you are talking about their size and ability to operate at a loss. I was addressing specifically the claim that their "monopoly" would assist in the adoption of their codec over some other companies. They aren't a major player in the DVD industry in either consumer products or media production. They don't have the same advantage as they have in the software industry to force computer manufacturers and hardware manufacturers to bend to their will. The MPAA members, who will be the primary intenties to decide what codec is adopted, are not dependent on MS products for their sales, and they are not succeptable to the same pressures that MS uses in its backyard to gain an advantage in the OS and Office suite market.

So instead of insulting me, care to enlighten me as to how their "monopoly" will influence this decision? Instead of giving me comparisons based on their economic resilience.

While MS is operating at a loss in an effort to gain market share in the gaming console industry, they are FAR from crushing Sony. Sony expects to have sold 3-4 times the number of PS2s to XBoxes this fiscal year (source).

Furthermore, MS is going to have a hard time crushing a company that brings in double it's revenue (Sony revenue in yen MS revenue), so if it comes down to a battle of who can sustain operating at a loss longer Sony has a decided edge.

Regardless, you are talking about their size and ability to operate at a loss. I was addressing specifically the claim that their "monopoly" would assist in the adoption of their codec over some other companies. They aren't a major player in the DVD industry in either consumer products or media production. They don't have the same advantage as they have in the software industry to force computer manufacturers and hardware manufacturers to bend to their will. The MPAA members, who will be the primary intenties to decide what codec is adopted, are not dependent on MS products for their sales, and they are not succeptable to the same pressures that MS uses in its backyard to gain an advantage in the OS and Office suite market.

So instead of insulting me, care to enlighten me as to how their "monopoly" will influence this decision? Instead of giving me comparisons based on their economic resilience.

MS-Office and MS-Windows are marked up about 5-6 times what would be normal for other products. Although everything else is losing scads of money, MS-Office and MS-Windows pull in 79% and 86% profit margins. In other words, the monopoly rents cost consumers billions -- a big drain on the economy even ignoring broken patches, interoperability and security problems.

If you start looking at value, the markup for Windows and Office is much higher since their offerings are of lesser quality and more effort that comparable tools from other sources. Even when I worked for a dept with deep pockets, I simply got tired of MS stuff not working. MS Products simply are not ready for the Internet. So I upgraded to some different GNU/Linux distros, which despite the FUD and spin are easier to install and maintain than any of the Windows flavors I had to deal with. Though, lately, I've started using OS X, which is even easier.

If you haven't already complained about SCO's conduct to the Federal Trade Commission and/or Better Business Bureau, you really should do so.

The SEC would be more appropriate. This story looks like a smoking gun for securities fraud.

No, it won't halt under its own intentions, but insiders who know what's happening and have info and proof can help.

See http://www.sec.gov/divisions/enforce/insider.htm for information on bounties for insiders reporting on those they work for. Insiders, we know you're reading this. We know YOU know this is FUD and stock pumping on SCOs part. Benefit from it legally guys.

Given that software distribution can have nearly zero cost, RedHat, SuSe, Apple and others seem to have more viable model. Even the RIAA could learn from them, though for both Microsoft and RIAA, I think they've waited too long and would do the U.S. economy the best by leaving the playingfield altogether.

The link that Slashdot provides is on Yahoo Finance, and is actually just an excerpt from the whole 10-Q.

To get the whole 10-Q, go to www.sec.gov. Click on "Filings and Forms (EDGAR)", subsection "Search for Company Filings". Click on "Companies and Other Filers". Company name "SCO", a couple more clicks, and ...

SEC 10-Q

Then search for "German" and this section pops up:

"Several entities in Germany have obtained temporary restraining orders in Germany precluding SCO GmbH, the Company's German subsidiary, in substance, from making statements in Germany that disparage Linux, or entities involved in the Linux business, or implicate Linux as infringing the Company's intellectual property rights. SCO GmbH has received an administrative fine of 10,000 Euro for a technical violation of one of the temporary restraining orders. The Company is currently negotiating with the various claimants in Germany over the temporary restraining orders and is evaluating whether it will appeal the administrative fine. Informal letter complaints similar to those raised in Germany have been received from companies in Austria and Poland. The Company has responded to those letters. It is not known if those complainants will take future action."

Can someone familiar with the 10-Q requirements explain whether this omission is permissable (because it was brought in Germany?)

I don't know the exact law, but the requirement is that the 10-Q disclose all of the material information about the company. "Material information" means relevant information; it means information that would make a reasonable investor likely to pay a higher or lower price for the stock. The German location is not relevant; what's relevant is whether this issue is likely to be important to SCO.

It's normal for a company to list all the important lawsuits that it is involved in, and then to say "the company believes the case has no merit and is vigorously contesting it", blah blah.

It's like selling a house. If I sell you a house, and I diclose in writing during the sale that the house contains asbestos, you might decide not to buy the house. But if you do buy the house, and then two years later you say "hey! this house has asbestos!" then I will say "you knew the house had asbestos when you bought it. Here's the paper you signed where you acknowledged that I told you that."

The 10-Q is like that for stock. If someone buys SCOX stock tomorrow, and then next year they come back and sue SCO's directors for not telling them about the German lawsuit, SCO's directors will point to the 10-Q and said "you had access to this information before you bought our stock".

Are y'all sure that Sun did give SCO $$$ recently?

Yup. I got yer links right here:

SCO 10-Q
Sun expands Unix deal with SCO

It seems that this is a more complete version of the filing:

Here is the relevant text:
"Several entities in Germany have obtained temporary restraining orders in Germany precluding SCO GmbH, the Company's German subsidiary, in substance, from making statements in Germany that disparage Linux, or entities involved in the Linux business, or implicate Linux as infringing the Company's intellectual property rights. SCO GmbH has received an administrative fine of 10,000 Euro for a technical violation of one of the temporary restraining orders. The Company is currently negotiating with the various claimants in Germany over the temporary restraining orders and is evaluating whether it will appeal the administrative fine. Informal letter complaints similar to those raised in Germany have been received from companies in Austria and Poland. The Company has responded to those letters. It is not known if those complainants will take future action."

It mentions the 10,000 fine but it doesn't mention that they had to pay 50,000 EU in lawyer fees because they didn't bother to show up for the preliminary hearing...

"Does anyone have any numbers of how far they'd be in the red if it wasnt for [the SCOSource] initiative?"

I think their payout per share was something like 18 cents. At roughly 13,825,000 shares, that would make the net profit approx. 2.5 million.

The SCOSource revenue for the most recent quarter was about 7.25 million. So without the SCOSource revenue, they would have lost about 4.75 million.

(Sorry for the rough estimates here, I'm pulling these up from memory cause, let's face it, 10-Q's are boring as all fucking hell and I don't feel like reading through it again. You can look it up yourself at SEC's website, if you want to verify my numbers.)

In recognition of the leadership and guidance [sic - sorry, couldn't resist] Mr. McBride brings to the Company, he was granted 600,000 options to purchase shares under the Company's 1999 Omnibus Stock Incentive Plan. Of the options granted to Mr. McBride, 400,000 options vest 25 percent after one year with the remaining 75 percent vesting at 1/36th per month thereafter, until fully vested. Of the remaining 200,000 stock options granted to Mr. McBride, 50,000 options will vest one year from the date of the Company's first profitable quarter (as long as that profitable quarter is before Q4 of fiscal year 2003) and the remaining 150,000 options will vest one year from the date the Company achieves four consecutive quarters of profitability (as long as the fourth quarter is before Q4 of fiscal year 2004).

The 10-K filing regulations (see Item 101(c)(1)(xiii)), which is the government filing I assume they are referring to, only says that the narrative description of the company should include "The number of persons employed by the registrant."

To determine whether someone is an employee or independent contractor I assume they would use the IRS guidelines which includes how much specific behavior control the company has over the persons and financial controls such as benefits, unreimbursed employee expenses, etc.

So to answer your question (and yes I am a CPA) the 10-K would not include temps and contract workers because they would not qualify as employees under the IRS guidelines.

Here , by the way, is SCO's quarterly report from a link posted at groklaw.com. I found it interesting that they placed no value on their "Goodwill" in the "Other Assests" section before the lawsuit, but now list it as "1,166".

Now that's some "creative" accounting!

During the three months ended July 31, 2003, Microsoft Corporation ("Microsoft") accounted for approximately 25 percent of total revenue and Sun Microsystems, Inc. ('Sun") accounted for approximately 12 percent of total revenue. During the nine months ended July 31, 2003, Microsoft accounted for approximately 16 percent of total revenue and Sun accounted for approximately 12 percent, of total revenue. There were no outstanding receivables from these two customers as of July 31, 2003. During the three and nine months ended July 31, 2002, the Company did not have any customers that accounted for more than 10 percent of total revenue.

These are from their 2003-09-15 Q10 filing

"We are informed that participants in the Linux industry have attempted to influence participants in the markets in which we sell our products to reduce or eliminate the amount of our products and services that they purchase. They have been somewhat successful in those efforts and will likely continue." -- Page 35

And oh... this was brought to you by Sun Microsystems and Microsoft:

"During the three months ended July 31, 2003, Microsoft Corporation (?Microsoft?) accounted for approximately 25 percent of total revenue and Sun Microsystems, Inc. (?Sun?) accounted for approximately 12 percent of total revenue. During the nine months ended July 31, 2003, Microsoft accounted for approximately 16 percent of total revenue and Sun accounted for approximately 12 percent, of total revenue. There were no outstanding receivables from these two customers as of July 31, 2003. During the three and nine months ended July 31, 2002, the Company did not have any customers that accounted for more than 10 percent of total revenue." -- Page 19

PS. Sun got a little gift for their money:

"In connection with the payment of $2,500,000 to us by Sun during the quarter ended July 31, 2003, we granted a warrant to Sun to purchase up to 12,500 shares of our common stock, for a period of five years, at a price of $1.83 per share. This warrant was valued at $150,000 using the Black-Scholes option-pricing model and reduced our licensing revenue for the quarter ended July 31, 2003 by that amount." -- Page 22

I said it before...

In a new article, SCO's Blake Stowell is quoted as saying, "As of Tuesday [Sept. 2], we actually began making the license available. Selling it and mailing it to someone is not something we've actually done as yet, but as of today we are able to do that".

Excuse me for being shocked, but didn't SCO announce on August 11th in a press release, that they'd sold the first license? And didn't SCO then go on to tell us that SCO had signed up at least one additional customer since it sold its first IP License for Linux on Aug. 11?

Wait there's more...

There is an interesting coincidence about the timing of 1st license announcement.

According to marketwatch.com on 11 August:
http://bigcharts.marketwatch.com/historical/defaul t.asp?detect=1&symbol=SCOX&close_date=8%2F11%2F03& x=48&y=18

Stock opened at $10.45
Heavy trading (965,500 shares)
Fell to a low of $8.27. From Yahoo message board (see below) this low appears to be part of a sharp decline around late lunch time.
Stock closed at $9.289

Go look around here for what was being said on the yahoo board around 1.30 to 2pm this time: http://finance.messages.yahoo.com/bbs?.mm=FN&actio n=l&mid=&board=1600684464&sid=1600684464&tid=cald& start=26210

The press release when SCO announced their first license was at 2.03pm ET according to the time stamp on it:
http://biz.yahoo.com/prnews/030811/lam083_1.html

No doubt the timing is all coincidence.

Another coincidence is that Michael Olson, had a 10b5-1 sell on that day:
http://www.sec.gov/Archives/edgar/data/1102542/000 110254203000049/xslF345X02/edgardoc.xml

No doubt, another coincidence.

So here's the quick summary:

1. SCO issued a press release, August 11, saying they sold their first Linux IP license: http://biz.yahoo.com/prnews/030811/lam083_1.html
2. The press release, luckily for SCO, appeared immediately after the stock crashed to a low of $8.27
3. A SCO insider had a pre-arranged plan to sell stock (and did so) on that day , 11 August: http://www.sec.gov/Archives/edgar/data/1102542/000 110254203000049/xslF345X02/edgardoc.xml
4. In September, SCO later said they had sold at least one other Linux IP license: http://www.infoworld.com/article/03/09/03/HNscocus tomer_1.html
5. In September, SCO later said they hadn't sold any Linux IP licenses: http://story.news.yahoo.com/news?tmpl=story&ncid=1 817&e=2&u=/zd/20030905/tc_zd/59210&sid=9612075 1
6. I am not sure of the order of articles 4 and 5 in date, but article 4 appears to have been published before 5.

In a new article, SCO's Blake Stowell is quoted as saying, "As of Tuesday [Sept. 2], we actually began making the license available. Selling it and mailing it to someone is not something we've actually done as yet, but as of today we are able to do that".

Excuse me for being shocked, but didn't SCO announce on August 11th in a press release, that they'd sold the first license? And didn't SCO then go on to tell us that SCO had signed up at least one additional customer since it sold its first IP License for Linux on Aug. 11?

Wait there's more...

There is an interesting coincidence about the timing of 1st license announcement.

According to marketwatch.com on 11 August:
http://bigcharts.marketwatch.com/historical/defaul t.asp?detect=1&symbol=SCOX&close_date=8%2F11%2F03& x=48&y=18

Stock opened at $10.45
Heavy trading (965,500 shares)
Fell to a low of $8.27. From Yahoo message board (see below) this low appears to be part of a sharp decline around late lunch time.
Stock closed at $9.289

Go look around here for what was being said on the yahoo board around 1.30 to 2pm this time: http://finance.messages.yahoo.com/bbs?.mm=FN&actio n=l&mid=&board=1600684464&sid=1600684464&tid=cald& start=26210

The press release when SCO announced their first license was at 2.03pm ET according to the time stamp on it:
http://biz.yahoo.com/prnews/030811/lam083_1.html

No doubt the timing is all coincidence.

Another coincidence is that Michael Olson, had a 10b5-1 sell on that day:
http://www.sec.gov/Archives/edgar/data/1102542/000 110254203000049/xslF345X02/edgardoc.xml

No doubt, another coincidence.

So here's the quick summary:

1. SCO issued a press release, August 11, saying they sold their first Linux IP license: http://biz.yahoo.com/prnews/030811/lam083_1.html
2. The press release, luckily for SCO, appeared immediately after the stock crashed to a low of $8.27
3. A SCO insider had a pre-arranged plan to sell stock (and did so) on that day , 11 August: http://www.sec.gov/Archives/edgar/data/1102542/000 110254203000049/xslF345X02/edgardoc.xml
4. In September, SCO later said they had sold at least one other Linux IP license: http://www.infoworld.com/article/03/09/03/HNscocus tomer_1.html
5. In September, SCO later said they hadn't sold any Linux IP licenses: http://story.news.yahoo.com/news?tmpl=story&ncid=1 817&e=2&u=/zd/20030905/tc_zd/59210&sid=9612075 1
6. I am not sure of the order of articles 4 and 5 in date, but article 4 appears to have been published before 5.

Prior to 1997, the company currently known as The SCO Group never reported a profit. Here's information from your S-1 registration

Began operations in 1994
Year ended 1995-10-31 revenue $0, net income ($1,350,000)
Year ended 1996-10-31 revenue $1,108,000, net income ($2,757,000)
Year ended 1997-10-31 revenue $1,117,000, net income ($8,148,000)
Year ended 1998-10-31 revenue $1,057,000, net income ($7,963,000)
Year ended 1999-10-31 revenue $3,050,000, net income ($9,367,000)

So who exactly is this "we" you are talking about? Because "your" company, The SCO Group, has had no profit in its entire history, except for the profit from the SCO Source program.

...then why isn't there a licensing line item on any of their balance sheets before the second quarter of fiscal year 2003?

Again, their Q2 10Q provides the truth:

"Licensing. Licensing revenue was $8,250,000 for the second quarter and first two quarters of fiscal year 2003 as compared to no revenue for the second quarter and first two quarters of fiscal year 2002. This revenue is the result of our intellectual property licensing program, SCOsource, launched in January 2003." For the record, their licensing revenue for the first quarter of fiscal year 2003 was zero.

I don't know why you're belaboring this point, because you're wrong. The only profits SCO/Caldera have ever generated are the result of Linux shakedown cash.

Nice spin, but in the 10-Q filing you can read that without the 8.25 million SCOsource revenue (kindly donated by SUN and Microsoft) SCO would not have been profittable that quarter but would have made a 3.68 million loss. This has been the first quarter they have been profittable and the only reason for that profitability is the SUN/Microsoft sponsoring. You can also read that Microsoft has promised them another 5 million to be spread over the next three quarters.

...their second quarter 10Q reported a $4.5 million profit on the basis of $6.1 million in net licensing revenue. Pull out the net licensing revenue, and SCO had a $1.6 million loss for the quarter.

What the SCOspeak in the filing cited in the article means is that if licensing revenues don't increase, then the mounting losses from their core business are going to drag the company's bottom line into the red.

And, yes, that means their core business is currently unprofitable and, as their Q2 financial shows, has been in the past. In fact, the only profitable quarters in the company's history have been the last two quarters of the current fiscal year. The profits for both of those quarters are exclusively attributable to "licensing revenues".

In short, SCO's "core business" -- whatever that is or was -- has always been unprofitable.

See, kids? That's why knowing how to read a financial statement is more important than anything you learn in school.

They've already dumped some of their common stock. However, these sales were "Planned" as in a 10b5-1 program that allows Insiders and Directors (holders of 10%+ of total outstanding common stock) to sell without violating SEC regs. If you look at the Form 4's filed with the SEC and visible here you'll see that the majority of the sales were for blocks of 5,000 shares.

SCO's CFO stated in a conference call that the total shares that the executives sold was 117,000. Which is less than 1.5% of the stock owned by insiders and that the majority of that was sold to cover taxes on "Restricted Stock Grants" that the company made to them.

There is a huge difference between common and restricted stock. The main one being that normally the holder of restricted stock cannot sell it for a set period of time, normally anywhere from 1 to 10 years thus locking in the share-holder and effectively basing their rewards upon the success or failure of the company.
The reason for the need to pay taxes on the restricted shares is that the IRS views them as "Income" when granted and thus taxes them accordingly.

They've already dumped some of their common stock. However, these sales were "Planned" as in a 10b5-1 program that allows Insiders and Directors (holders of 10%+ of total outstanding common stock) to sell without violating SEC regs. If you look at the Form 4's filed with the SEC and visible here you'll see that the majority of the sales were for blocks of 5,000 shares.

SCO's CFO stated in a conference call that the total shares that the executives sold was 117,000. Which is less than 1.5% of the stock owned by insiders and that the majority of that was sold to cover taxes on "Restricted Stock Grants" that the company made to them.

There is a huge difference between common and restricted stock. The main one being that normally the holder of restricted stock cannot sell it for a set period of time, normally anywhere from 1 to 10 years thus locking in the share-holder and effectively basing their rewards upon the success or failure of the company.
The reason for the need to pay taxes on the restricted shares is that the IRS views them as "Income" when granted and thus taxes them accordingly.

Diebold's SEC filings show their Chairman / President / CEO to be Mr. Walden W. O'Dell, who has donated $2000 this summer to Senator George V. Voinovich, Republican from Ohio (Diebold's home state). Diebold Inc.'s soft money donations also go to Republicans.

This does not demonstrate to me much evidence that Diebold is "after something other than money", it looks like routine political activity to me. But, while my quick research has neither managed to refute nor confirm your conspiracy theory, I'll pass it along anyway for whoever might be curious.

If you look you'll see that the amount of stock trades by SCO execs has been fairly consistent for years ...

I'm calling you out, astro-turfer.

Sales of SCOX by insiders in calendar year 2001: 0.
Sales of SCOX by insiders in calendar year 2002: 0.
Sales of SCOX by insiders in 2003 before announcement of IBM lawsuit: 0.

My source: Company Information: SCO GROUP INC

"Fairly consistent for years?" Where the fuck is your source for that statement?

Note that the two transactions before the lawsuit are not sales; they are purchases -- by McBride -- at pre-lawsuit prices.

You are right, fraud and insider trading are different things.

Fraud would be making knowingly false statements, like BRE-X and its gold mines.

Insider trading is defined as "trading on material non-public information". The essence of the crime is that the seller knows something important that the buyer does not know.

The "safe harbor" for SCO executives is that they irrevocably committed to sell this stock back in January, before the price went up. The weakness in their safe harbor is that they surely knew they were about to embark on a lawsuit and PR campaign. In my opinion the real evidence would be the timing they had on their negotiations with Microsoft and Sun to fund their anti-Linux campaign. After all, SCO already hired Boies back in January.

Now if a SCO executive had a 10b5-1 plan set up in, say, July 2001, they would have a much stronger position that they didn't know back in July 2001 SCO was gonna hire McBride, exit the Linux business, and enter the FUD business.

Here's some links about safe harbors:

Stock Trading Plans under Rule 10b5-1

SEC Regulations

Actually, it doesn't really look like a pump-n-dump.
Looking at the filings on Edgar for SCOX there is a SC 13G "Statement of Aquisition of Beneficial ownership" from a VC firm called Integral Capital Managment LLC, on 8-28-2003 for 680,000 shares.
The SCO executive sales could very well have been necessary to free up the shares for this purchase.
It will be interesting to read SCO's 10-Q for this quarter when they release it.

Taken from page 12 of SCO's Q2 FY2003 quarterly report:

Pursuit of the litigation against IBM and, potentially, others will be costly, and management expects the costs for legal fees could be substantial. In addition, the Company may experience a decrease in revenue as a result of the loss of sales of Linux products and initiatives previously undertaken jointly with IBM and others affiliated with IBM. The Company anticipates that participants in the Linux industry will seek to influence participants in the markets in which we sell our products to reduce or eliminate the amount of our products and services that they purchase. There is also a risk that the assertion of the Company's intellectual property rights will be negatively viewed by participants in our marketplace and we may lose support from such participants. Any of the foregoing could adversely affect the Company's position in the marketplace and our results of operations. The ultimate outcome or potential effect on the Company's results of operations or financial position is not currently known or determinable. [emphasis added]

This is in a footnote to the company's financials. Yet, when the company's CEO speaks publicly about the matter (and the related actions the company is taking), none of these risk factors are mentioned. Intellectual property litigation is a high-risk proposition under any circumstances. Given the convoluted pedigree of the rights involved in this case, asserting that a favorable outcome is certain -- as Mr. McBride has done with every reporter he has talked to -- is speculation of the most pernicious order, and shows a reckless disregard of his duty to provide the investing public with an accurate statement of the company's affairs.

The conscientious exercise of that duty would seem especially important for a publicly-traded corporation where insiders or related parties own almost 50% of the outstanding stock, and millions of low-balled options are in the portfolios of executives and board members. Based on Mr. McBride's statements -- which are ultimately self-serving, since he has an interest in 800,000 options priced between $0.76 and $2.07 a share -- the price of SCOX has septupled in just six months. Whether its the product of fact or fiction remains to be seen, but there seems to be something very, very wrong with a CEO publicly contradicting the risks reported in a company's financial statement.

Darl's last form 4
Looks like he only owns 5000 shares.

You're poorly informed. Sun confirmed that they are the first licensee here:

Sun expands Unix deal with SCO

There is nothing in current or past SEC filings which suggests MS or Sun are supporting SCO.

You're also a liar. I've got your SEC filing naming Microsoft right here.

SCO 10-Q

Page 21: "The second license was to Microsoft."

Unlike you, I actually bother to read what SCO reports.

The last article looks like it'd be of interest to the SEC, though I'm not going to hold my breath on that one.

Darl's most recent form 4 shows he only owns 5000 shares.

2 sales, 2500 each, sale price 14.3 and 14.26 for a total of $71375. He only has 15,494 more shares to go.

"During the quarter ended April 30, 2003, we recognized $8,250,000, or 39 percent of our quarterly revenue, from our intellectual property licensing initiative, SCOsource, launched in January 2003."

Obviously some people are stupid enough to license.

One little problem with your one little issue: Sun paid SCO after SCO publicly announced they hired David Boies.

SCO hired David Boies on or before, January 10, 2003.

SCO Threatens to Press IP Claims on Linux

On January 22, 2003, SCO made their public announcement.

Has SCO Fired Shot to Start Linux War?

Sun closed their deal, paid their money, and received their stock warrant on or after February 1, 2003.

SCO 10-Q

I think Sun knew what SCO was planning to do with Boies, especially since SCO and IBM had already held talks by then, and Sun negotiated an equity stake in SCO as part of Sun's deal with SCO.

We'll find out more when SCO files their next 10-Q.

Sun expands Unix deal with SCO

And for gritty deals on the warrant agreement (search for 'warrant agreement')

SCO 10-Q quarter ended 2003-04-30

We would simply bend over and pay up like good little lemmings?

Aside from the mixed metaphor - lemmings don't commit suicide. You may already know this but I wanted to help educate the general public...

Who knows what other lies Disney has been feeding us? Next we'll find out that there aren't really mermaids!

Oh, and to stay on topic, here is some info on making a complaint to the FTC. Here's the link to the online FTC complaint form. For good measure, you can also submit a complaint to the SEC here.

Has anyone been here to fill in a SEC complaint yet?

Online complaint form for the SEC:

http://www.sec.gov/complaint/selectconduct.shtml

You'll have to check your particular state for information on how to contact your attorney general; for PA, it's: http://www.attorneygeneral.gov/ (and the contact form is http://www.attorneygeneral.gov/contact/Index.cfm)

SEC Enforcement Complaint Form