SCO Quashes SEC Investigation Rumor

A minor tempest in a legal teapot swirled up around litigious Linux vendor SCO on Thursday, via a posting on the open-source community site Slashdot, which speculated that SCO might be under SEC investigation. SCO said that wasn't the case.

That item was a pick up of a Wednesday evening posting from the open-source advocacy Web site Groklaw, which cited language in a document SCO filed May 18 with the Securities and Exchange Commission. "In addition, regulators or others in the Linux market and some foreign regulators have initiated or in the future may initiate legal actions against us, all of which may negatively impact our operations and future operating performance," read a sentence in SCO's filing, which was submitted as part of documentation it's providing in preparation for a stock sale.

Groklaw highlighted that sentence, telling its readers that it "stood out" and asking "Do you remember seeing that before? I don't." Slashdot took the inference a step further, teasing its post with the headline, "SEC Investigating SCO?"

However, according to SCO, that's not the case. "About two years ago, there was some initial legal activity in Germany and in Australia," said SCO spokesman Blake Stowell. "Because of that, for about the last six quarters or so, we have put those exact words in our quarterly SEC filings."

Both cases involved SCO's ability to make public comments about Linux, Stowell said. "In Germany there were some temporary restraining orders, that prohibited SCO from talking about Linux issues within Germany," he said. The Australian case involved an unspecified open-source organization, which was seeking similar restraints.

Neither case is currently active, according to Stowell. "To my knowledge, I believe they're resolved," he said.

Asked if SCO is currently under any kind of SEC investigation, Stowell answered: "We're not."