Analysis: Microsoft, SCO have a lot more explaining to do

Is Microsoft bankrolling SCO? Many Linux fans suspect that that is the case, and now the SEC may be looking into it.

Whether or not Microsoft is secretly bankrolling the SCO Group for more than $100 million to attack Linux and the general open source community through questionable intellectual property lawsuits, NewsForge has learned that U.S. federal regulators may have begun investigating the relationship between the two companies -- and may also be looking closely at a number of other people and companies connected to them through stock or other business transactions.

Although the Securities and Exchange Commission (SEC) never officially makes public when it investigates an organization, an SEC staff member told NewsForge that complaints and tips about suspected under-the-table funding, stock-kiting, illegal insider trading, and money-laundering involving Microsoft or Microsoft-connected individuals to the financially struggling SCO Group have been coming into the agency with regularity since last August. The SEC "does not take such complaints lightly," the source said.

Most of the complaints have been registered by telephone and by using the SECs Web site. "Weve gotten a lot of them," the SEC source said. An SEC investigation would look into alleged backtracking and charting fund transfers, suspicious timing of certain stock transactions, possible instances of stock-kiting and insider trading, and other potentially serious infractions.

Other individuals may be far ahead of the SEC in this investigation. Several open source advocates have been conducting their own, private investigations of SCOs financial dealings for many months.

For the rest of the story, visit NewsForge.