You may think that most Wall Street analyst reports are a waste of paper and pixels. But they’re newsworthy because they often move stock prices. That’s why business news organizations are breathing a sigh of relief today following a U.S. Court of Appeals for the Second Circuit ruling that upholds their right to report on analysts’ recommendations — even before the analysts’ clients have a chance to read the updates. The court said that research analysts make news in much the same way the NBA does with a basketball game, or the American Theater Wing does with the Tony Awards. Just because Wall Street firms make the news, the court said, “does not give rise to a right for (them) to control who breaks that news and how.” The decision overturned a district court ruling that sided with Bank of America’s Merrill Lynch, Barclays, and Morgan Stanley in their effort to stop a financial news website, Theflyonthewall.com, from selling daily updates listing changes in financial firms’ recommendations. The firms said that the website was enjoying a free ride off of their work. They also said that their reports were protected under a New York law that grants copyright protection to providers of “hot news.” Last year the district court said that the website would have to wait until 10:00 AM ET to report on analyst recommendations made before 9:30 when the markets open, or two hours after the firms issued new recommendations. That order was not enforced during the appeal. The appeals court shot it down, citing federal copyright laws that it says supersede the New York law. Google, Twitter, and the Electronic Frontier Foundation filed briefs supporting Theflyonthewall.
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