July 28, 2006 in Business

Kazaa changing file-sharing ways

The Spokesman-Review
 

One of the big guns of the Wild West days of freely downloading music and movies over the Internet is going straight.

Settling lawsuits around the world, the company behind software called “Kazaa” said Thursday it will redesign its pioneering file-sharing program to block customers who try to find and download copyrighted music and movies.

It also will offer licensed entertainment for a price, and it agreed to pay more than $115 million in penalties to leading music and movie companies.

The settlement ends one of the longest-running and fiercest copyright disputes of the Internet era, in which the entertainment industry spent millions suing Sharman Networks Ltd. and the company’s customers to end the illegal trade of its products.

Kazaa’s popularity has declined dramatically in recent years amid concerns over “spyware” monitoring programs bundled with its freely distributed software and as new, more efficient downloading services – both legal and illegal – emerged.

‘Wrong number’ scam charged

The federal government on Thursday charged three Florida residents with conspiracy and securities fraud in a scheme using thousands of phony voicemail messages left on people’s answering machines to entice them to buy certain stocks.

The U.S. attorney for the District of Columbia, Kenneth Wainstein, announced that a federal grand jury had returned an indictment against Anna Boling, Roderic L. Boling and Jeffrey S. Mills, who are accused of orchestrating the “wrong number” voicemail scheme.

In the summer of 2004, Mills and the Bolings, who were married at the time, distributed the voicemail messages to households nationwide, the government alleges.

The messages were made to seem mistakenly left on answering machines, often made by a caller identifying herself as “Debbie” who wanted to pass along to a girlfriend a “hot” stock tip from a “hot stock exchange guy” she was dating, according to the authorities.

The scheme is described as a new twist on the “pump and dump” stock-fraud scam, using phony messages to talk up small, thinly traded stocks and push up their prices, and then selling their own shares at a profit.

Delphi creditors want to sue GM

Delphi Corp.’s creditors aim to use confidential information obtained from a Securities and Exchange Commission investigation to prepare a potential billion-dollar lawsuit against General Motors Corp. and several former Delphi executives.

In papers filed with the U.S. Bankruptcy Court in Manhattan on Thursday, Delphi’s creditors committee said it will submit a draft of the lawsuit soon in a bid to win court authorization to file it.

It asked a judge to seal the draft once it is submitted, saying its public dissemination could hurt Delphi’s restructuring negotiations.

The creditors committee is seeking the right to sue GM, Delphi’s biggest customer, to recover “billions of dollars in payments” related to damages it says Delphi suffered when it was spun off from GM in 1999.

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