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. As Bloomberg reports, "U.S. District Judge Denise Cote in New York today granted a request for an injunction sought by the three banks. They argued at a March trial that Theflyonthewall.com, a Summit, New Jersey- based firm with about 30 employees, wrongfully obtains and sells reports on changes to the banks’ stock evaluations." This is merely a case of picking on the weakest: the next ones to lose their First Amendment right will be, in order of importance, StreetAccount, Thomson Street Events, Briefing, and, ultimately Bloomberg. The reason: keep the market as two-tiered as possible so that clients of the above three banks (which list will likely expand promptly as more banks join in) have an upper hand over all the slower retail and algo operations. With this forced lag in information (which is a joke because anyone who cares, knows the second a research report goes public anyway), and with the ever increasing transaction times courtesy of nanosecond collocation facilities, soon the self-cannibalizing market will only rely on stealing money from those accounts who are still willing to participate in a market that is now split into two distinct groups: those who make money, and are clients of MS, ML and Lehman (and the rest of Wall Street), and everyone else. This is a huge hit for not just traditional media, but for the blogosphere as well, which revels in the freedom of not just ridiculing banks' (Merrill Lynch) upgrades of horrendously shitty companies (REITs), but enjoys doing so in real time. We expect that the next step is that any blog or medium that has any negative things to say about Merrill, MS or Barclays (pretty much most independent media), will be served with a summons as soon as any criticism is made public.