Copyright Infringer Receives Nearly 5 Years in Prison
James Baxter, of Wichita, Texas, was sentenced to 57 months in federal prison for violating federal copyright law. From 2006 to 2007 he sold “backup” copies of Adobe products such as Photoshop and Illustrator on various websites that he owned and operated. Baxter is the seventh man from one Wichita piracy ring to be convicted of software copyright violations. Altogether the piracy ring received $3 million in illegal sales from $15 million worth of infringing products.
Corporate Governance & Shareholder Activism
AOL Activist Shareholder Starboard Value Nominates Slate of Directors
Starboard Value, a New York-based hedge fund and activist shareholder of AOL, nominated its own slate of directors for election to the AOL Board at the company’s 2012 annual meeting. Starboard Value currently owns 5.2% of AOL and was recently successful in similar activist efforts when it won 3 seats on the board of Regis Corp. Among those nominated by Starboard is the Starboard CEO. AOL released a statement indicating its opposition to Starboard Value’s nominees, emphasizing that AOL has made significant progress this year under the current board, as 2011 was AOL’s best year in the last five.
Mergers & Acquisitions
Delaware Court Allows Acquisition to Proceed Despite Goldman’s Presence on Both Sides of Deal
The Delaware Court of Chancery denied a preliminary injunction by investors of the El Paso Corporation to block the acquisition of the company by Kinder Morgan. The plaintiff investors complained that the company was being sold too cheaply, and alleged a conflict of interest at the heart of the deal warranted the court’s blocking of the acquisition. Goldman bankers were advising the target company El Paso, but Goldman owns 19% of the acquirer Kinder Morgan, and is a long-time adviser for Kinder Morgan. By denying the preliminary injunction Chancellor Strine allowed a future shareholder vote on the acquisition to proceed. Chancellor Strine noted that she denied the injunction “reluctantly… despite the disturbing nature of some of the behavior leading to [the proposed terms of acquisition.]”
Michael Douglas Stars in Public Service Announcement Against Insider Trading
The federal government has stepped up its efforts to halt insider trading, and has now turned to Michael Douglas for support. The actor who won an Academy Award as a morally bankrupt criminal (Gordon Gekko was no Omar, for you Wire fans) is now featured in the following public service announcement denouncing insider trading: