Google Gives It UpThe court ruled, Google ( GOOG) caved and the Supermodel got her way. Former Vogue cover girl Liskula Cohen was granted a court order this week forcing Google to reveal the identity of an anonymous blogger who trashed her online. A Manhattan Supreme Court judge ruled that she was entitled to the information and ordered Google, which ran the offending blog, to disclose it. On Good Morning America Wednesday, Cohen said she called her online tormentor and told her "If I've ever done anything to you to actually deserve this, that I'm really very sorry." Not as sorry as Google is going to be now that this identity-revealing precedent is set. In a filing back in January, Cohen said that comments posted on Google' s Blogger.com were defamatory, malicious and untrue. "I would have to say the first-place award for "Skankiest in NYC" would have to go to Liskula Gentile Cohen," wrote "Anonymous" in one posting. Anne Salisbury, a lawyer for the blogger, argued that the crude attacks on Cohen were merely "youthful, jocular, slangy" terms that are protected by the courts. Justice Joan Madden, however, rejected that view, saying that the blogs "serve as a modern-day forum for conveying personal opinions, including invective and ranting". We here at the Five Dumbest Lab may not be legal scholars, but we say the whole thing is just a silly elementary school catfight spun out of control and is now unfortunately clogging our courts. That said, the big loser in this unseemly affair is not the thin-skinned supermodel or the jealous blogger but Google. The Web services giant will now be on the hook to divulge the identity of every anonymous poster with an Internet connection and an ax to grind. Google spokesman Andrew Pederson claimed no such worries saying the company would "respect privacy concerns and will only provide information about a user in response to a subpoena or other court order." Sorry Andrew. But Google has already started down the slippery slope. Get ready to drown in a sea of litigation. Dumb-o-meter score: 90 -- Somebody Google up the First Amendment.
Apple's Collusion DelusionApple ( AAPL) CEO Steve Jobs must have been sauced when he tried to broker a deal with Palm ( PALM) to stop poaching each other's employees two years ago. At the time of Jobs' secret communique, Apple had just rolled out the iPhone and Palm had snapped up a former Apple executive, Jon Rubinstein, to develop new smart phones. Worried that Rubinstein would start bringing Apple employees over to Palm, Jobs told Palm CEO Ed Colligan: "We must do whatever we can to stop this," according to communications revealed by Bloomberg News this week. Just what exactly Jobs proposed to Colligan wasn't disclosed, but Jobs did reportedly say that Apple had the funds to bury Palm if the companies ended up in a legal fight. Wow. That trademark turtle neck must have been cutting off circulation to Jobs' brain! Even two years after the fact, the Feds could still investigate both companies for collusion. Colligan, who stepped down in June, rejected Jobs offer, apparently recognizing the obvious risk of running afoul of the Feds, according to a Bloomberg report this week. "Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal," Colligan reportedly said at the time. Likely illegal. And definitely dumb. Dumb-o-meter score: 80 -- Jobs beat the options backdating rap so now he thinks he can get away with collusion?
Lockheed's Empty LobbyNow that the F-22 fighter jet has been shot down in Congress, Lockheed Martin ( LMT) should lobby for its lobbying money back. The Bethesda, Md-based defense contractor spent $3.3 million in the second quarter lobbying on tactical aircraft and other defense systems, according to a recent filing. In addition to Congress, Lockheed lobbied the departments of Defense, State, Commerce and Homeland Security, NASA, and the White House's Office of Management and Budget. Boy, the price of peddling influence sure has skyrocketed. Not like the good old days when a nice bottle of wine and some show tickets would get you an intercontinental ballistic missile. The company did not name specific weapon systems it lobbied for during the three-month period, but you can bet your bottom dollar that the F-22 topped their list. Earlier this year, Lockheed was trapped in a dogfight between the Pentagon and lawmakers in states with jobs at stake that wanted additional funding to buy more Cold War-era fighter jets. Even as Lockheed's agents wined and dined every elected official in the 202 area code to save the F-22, Defense Secretary Robert Gates already had it locked in his sights a la Tom Cruise in Top Gun. In April, Gates said the jet "does not make much sense anyplace else in the spectrum of conflict." Ultimately, the Democratic-controlled Congress killed plans to buy more of the Lockheed fighter jets after a White House veto threat. The victory was a big one for President Obama, who did his own lobbying to secure the necessary votes by sending Vice President Joe Biden into the fray. Now that's one loose cannon that even Lockheed's millions can't match. Dumb-o-meter score: 75 -- Note to Gates: You should know by now that conflicts on Capitol Hill rarely make sense.
SEC's Late ArrivalWait a darn second here! Who woke up the SEC to the dangers of leveraged ETFs? The Securities and Exchange Commission issued an investor alert Tuesday warning retail investors that leveraged and inverse exchange-traded funds are "highly complex financial products" that "can turn into a minefield for buy-and-hold investors." Wait! You mean people can lose money in a blink by betting on leveraged ETFs? This is new? Well, it would be new only to Rip van Winkle. While the SEC slept or studied the issue or did whatever it does, the debate over these high-powered financial instruments raged on our Web site and others for the past six months. Last month, in the face of investor anger over outsized losses UBS ( UBS) suspended purchases of leveraged and inverse ETFs for clients saying "the short-term nature of these securities is generally inconsistent with the long-term view of investing that UBS advocates when building client portfolios." Edward Jones, a St. Louis-based brokerage, and Minneapolis-based Ameriprise Financial ( AMP) also halted leveraged-ETF sales a long time ago. Meanwhile, like illegally downloaded movies, demand for these souped-up trading vehicles has only increased with every brokerage house ban and negative article. For instance, the Direxion Daily Financial Bull 3X Shares ( FAS), which seeks to return 300% of the daily performance of the Russell 1000 Financial Services Index, trades an average of 36 million shares a day, far outstripping most of the Dow 30 names. The FAS debuted in November 2008, so it's not even a year old. The ProShares Ultra Financials ETF ( UYG), which debuted in February 2007 and offers two times leverage, trades a whopping 49 million shares a day. For the record, we here at the Five Dumbest Lab believe individual investors have the right to buy leveraged ETFs once they are aware of the risks involved. Losing or making gobs of money in a very short time is the prerogative of every trader, not just institutions. It just would have been nice for the SEC to make these risks better known before the losses grew out of hand and the class action suits started flying. Dumb-o-meter score: 70 -- What we need is a leveraged SEC that works they times faster.