A Little Fly On The Wall Defeats The Big Banks
Back in April 2010, Zero Hedge wrote an article titled "Banks Stifle First Amendment, Attempt To Create A Tiered Market Of "Clients" And "Everyone Else" As Theflyonthewall.com Is Blocked From Instant Stock Research Reporting" describing how "Theflyonthewall.com, which is a news aggregator service (much like most
of the blogosphere these days, but without the snarky commentary), and
is hosted on Zero Hedge, has just seen a major driver of its business
model cut off, after several banks just won an injunction that blocks
Fly from notifying its clients when a bank may have issued a research
event such as an Upgrade or, on those extremely rare occasions nowadays,
Downgrade. The banks who feel violated by everyone getting access to
information about their sellside detritus contemporaneously, not just
wealthy accounts and wire services, are Barclays,
Bank of America Corp.’s Merrill Lynch, and Morgan Stanley." We spared no words to explain the stupidity of this action: "this injunction is about the dumbest thing one could imagine: news of sell side research changes are reported immediately by Bloomberg, Reuters and all the major newswires. Why did Lehman, Morgan and Merrill not take them on? Oh yeah, limited budget. And now that they have a case precedent, the door is open to demand cashola or threaten with shutting down the big boys. As for the rest of the blogosphere - good luck." Well, it won't come to that. Our friends at Fly just won their case.
From Fly on the Wall:
The Second Circuit Court of Appeals today handed Theflyonthewall.com a complete victory in its long running battle with the investment firms Barclays Capital, Merrill Lynch, and Morgan Stanley, that sought to enjoin Theflyonthewall.com from reporting “hot news” to its subscribers relating to the investment firms’ recommendations to their own subscribers. The Second Circuit had previously stayed the injunction issued against Theflyonthewall.com, but today the Second Circuit unanimously reversed the district court opinion in a sweeping 71 page opinion that will define the dissemination of hot news in the digital era. Glenn Ostrager, lead counsel for Theflyonthewall.com, stated that "the case was among the most challenging cases I have ever handled because of the enormous legal resources the investment firms drew upon to prosecute the case”. Nevertheless, Ostrager said that he always believed in the merits of the case and he is gratified that the Second Circuit has written a definitive opinion clarifying the law in this area. Theflyonthewall.com will continue to publish its daily news feeds.
Congratulation to Fly, while to all the big bad banks who think they have a monopoly on information flow, in addition to physical gold, corruption, hubris, megalomania, and bribery, go to hell.