Website wins tussle over ‘hot’ stock tips
Wall Street banks were handed a major defeat Monday when a U.S. appeals court ruled an online news service did not misappropriate their stock research by publishing headlines about analyst upgrades and downgrades.
Reversing a lower-court ruling, the federal appeals court said theflyonthewall. com could not be liable for systematically republishing “hot news” on its website.
Bank of America Corp’s Merrill Lynch unit, Barclays and Morgan Stanley argued the website was getting a “free ride” on their research, costing them profits.
“A firm’s ability to make news — by issuing a recommendation that is likely to affect the market price of a security — does not give rise to a right for it to control who breaks that news and how,” Judge Robert Sack wrote for a three-judge appeals court panel.