The New News
alleged that theflyonthewall.com (“Fly”) committed “hot news” misappropriation and copyright violations by taking and disseminating the recommendations, sometimes doing so before the financial firms disseminated the information to their own customers.177 The recommendations are considered “hot news” by the financial firms because the vast majority of them are released within a few hours of the opening of the stock market, and a strong recommendation has the potential to “move the market price of a stock significantly, especially when a well-respected analyst makes a strong [r]ecommendation.”178 Therefore, the firms’ clients can benefit from the recommendation because they give the clients a potential “early informational advantage.”179 In addition to releasing the recommendations to their own clients through several subscription-based and password-protected media, the firms also license the content to other providers, including Bloomberg and Thomson Reuters.180 Not only are the recommendations limited to certain “entitled” clients, the recommendations are also personalized for those clients.181 The firms also employ strict policies and technological innovations in order to maintain the security and control the dissemination of the recommendations.182 Fly also shares financial news and recommendations via subscription service.183 It boasts that it provides analysis that beats the news wires and offers the same recommendations as the traders on Wall Street use.184 Despite offering the same recommendations, Fly’s website admitted, “Fly staff are not brokers, dealers, or registered investment advisers.”185 In addition, although Fly streams an online newsfeed that is updated constantly between 5 a.m. and 7 p.m., “Fly does not conduct its own equity research or include any original research in its news feed.”186 Customers who subscribe to Fly’s news feed can customize their subscription to three different packages.187 The recommendations that Fly posted on its news feed came directly from the financial firms via employees who were not authorized to send the recommendations to Fly.188 After Fly’s staff received the recommendations from the financial firms’ employees, they would “select those it wished to publish, and then type each [r]ecommendation as a headline into its own newsfeed, sometimes accompanied by an extended passage lifted essentially verbatim from the report explaining the basis for the [r]ecommendation.”189 According to the owner of Fly, he discontinued the practice of reporting verbatim the recommendations that Fly received from the financial firms after the lawsuit was initiated and instead confirmed the recommendations “from at least two and sometimes three independent sources before publishing them.”190 177. Id. at 313. Fly filed counterclaims alleging “defamation, tortuous interference with prospective business relations, and unfair competition under § 43(a) of the Lanham Act.” Id. at 314. Those counterclaims were eventually dismissed. Id. 178. Barclays Capital, 700 F.Supp.2d at 316. 179. Id. 180. Id. at 317. 181. Id. at 318. 182. Id. at 319-20. 183. Id. at 322. 184. Barclays Capital, 700 F.Supp.2d. at 322-23. 185. Id. at 323. 186. Id. 187. Id. at 325. Fly’s customers include “individual investors, institutional investors, retail investors, brokers, and day traders. Id. 188. Id. 189. Id. 190. Barclays Capital, 700 F.Supp.2d at 326.
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