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St. Louis Business & Technology News
www.slfp.com/SLFPBIZp.htm "When you think Saint Louis, think Saint Louis Front Page," a weekly publication covering the news and events in the greater St. Louis area. 
St. Louis Front Page P.O. Box 1354 St. Louis, MO 63188 Voice: 314-771-0200 Fax: 314-771-0300 To submit news, contact: editor@slfp.com To advertise, contact: advertising@slfp.com 
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WASHINGTON, D.C., (SLFP.com) September 14, 2003 - On Monday, September 8, member companies of the Recording Industry Association of America (RIAA) filed copyright infringement claims against 261 individual file sharers in the first wave of what could ultimately be thousands of civil lawsuits against major offenders who have been illegally distributing substantial amounts of copyrighted music on peer-to-peer networks. The RIAA emphasized that these lawsuits have come only after a multi-year effort to educate the public about the illegality of unauthorized downloading and noted that major music companies have made vast catalogues of music available to dozens of new high-quality, low-cost, legitimate online services. The RIAA has also announced that the industry is prepared to grant what amounts to amnesty to P2P users who voluntarily identify themselves and pledge to stop illegally sharing music on the Internet. The RIAA will guarantee not to sue file sharers who have not yet been identified in any RIAA investigations and who provide a signed and notarized affidavit in which they promise to respect recording-company copyrights. In a statement, Mitch Bainwol, RIAA Chairman and CEO said that "For those who want to wipe the slate clean and to avoid a potential lawsuit, this is the way to go. We want to send a strong message that the illegal distribution of copyrighted works has consequences, but if individuals are willing to step forward on their own, we want to go the extra step and extend them this option." "Nobody likes playing the heavy and having to resort to litigation," said RIAA president Cary Sherman. "But when your product is being regularly stolen, there comes a time when you have to take appropriate action. We simply cannot allow online piracy to continue destroying the livelihoods of artists, musicians, songwriters, retailers, and everyone in the music industry." Since the recording industry stepped up the enforcement phase of its education program, public awareness that it is illegal to make copyrighted music available online for others to download has risen sharply in recent months. According to a recent survey by Peter D. Hart Research Associates, fully 61% of those polled in August admitted they knew such behavior was against the law- up from 54 percent in July and 37 percent in early June, prior to the announcement. "We've been telling people for a long time that file sharing copyrighted music is illegal, that you are not anonymous when you do it, and that engaging in it can have real consequences," said Sherman. "And the message is beginning to be heard. More and more P2P users are realizing that there are dozens of legal ways to get music online, and they are beginning to migrate to legitimate services. We hope to encourage even the worst offenders to change their behavior, and acquire the music they want through legal means." Over the past year, the RIAA has also worked closely with the university community to combat piracy. In recognition of the seriousness of the problem, colleges across the country are implementing new restrictions-and issuing severe warnings-to discourage the swapping of pirated music and movies over high-speed campus Internet connections. Additional education efforts include more than four million Instant Messages sent since May directly to infringers on the Kazaa and Grokster networks warning them that they are not anonymous when they illegally offer copyrighted music on these networks and that they could face legal action if they didn't stop. The RIAA sent such a warning notice to virtually every Kazaa and Grokster user who was sued today. "Obviously, these individuals decided to continue to offer copyrighted music illegally notwithstanding the warnings," said Sherman. "We hope that today's actions will convince doubters that we are serious about protecting our rights." For more information on the amnesty program, go to musicunited.org. Collapse of St. Louis Brokerage Firm Tied To Earlier Eberhard/Park South Failure WASHINGTON, D.C., (PRNewswire) September 14, 2003 - The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at bankrupt brokerage firms, has announced that 3,200 customer accounts containing $106 million are being transferred on an expedited basis from Clearing Services of America (CSA), a failed St. Louis, Missouri-based brokerage firm, to Saxony Securities, also of St. Louis. The CSA liquidation is linked to the February 2003 failure of New York City-based Park South Securities due to misconduct on the part of owner/broker and television investment personality Todd M. Eberhard. Saxony Securities clears its transactions through Pershing Securities, which is the same clearing firm previously used by CSA. In a statement, SIPC General Counsel Steve Harbeck said that "The fact that CSA and Saxony had Pershing Securities in common as a clearing firm should permit customers to execute sales transactions more quickly than is the case in a typical liquidation proceeding. On this expedited basis, the former CSA clients should have full access to their assets in terms of purchases and sales in as little as one week." On September 8, 2003, Judge Catherine Perry of the U.S. District Court for the Eastern District of Missouri entered an order placing Clearing Services of America into liquidation under the Securities Investor Protection Act. The judge also appointed Thomas Vandiver to serve as trustee in the matter. According to SIPC, Todd M. Eberhard had used Clearing Services of America as a base of operations prior to his involvement with the failed Park South brokerage firm and related entities. On February 5, 2003, the Securities and Exchange Commission (SEC) filed an emergency action charging securities fraud, including looting of customer brokerage accounts, against Eberhard and his brokerage and investment advisory firms, Park South Securities, a registered broker-dealer and registered investment adviser, and Eberhard Investment Associates, Inc., an investment adviser that was not registered with the SEC. A total of nearly 2,300 customer accounts containing $77 million were initially frozen in the Eberhard/Park South liquidation handled by SIPC. Harbeck stated that "This is an unusual case in that we had a domino situation where the collapse of one brokerage firm led to the uncovering of similar problems at another brokerage firm. What we did here was follow the money in the Park South case when it led us to the alleged misconduct in Mr. Eberhard's earlier history." "Our goal here is to be as thorough as possible to ensure that the full scope of the damage inflicted by Mr. Eberhard is tracked down and contained. In this context, we want to recognize the collaborative efforts of the NASD and, in particular, that organization's diligent efforts to make sure that as few investors end up being inconvenienced by the CSA liquidation as is possible," said Harbeck. Return to St. Louis Front Page  
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