Three Wall Street banks urged a Manhattan federal judge not to lift an injunction on Theflyonthewall.com Inc's quick publication of analyst rating changes, saying the financial news service failed to show the ban threatens its ability to stay in business.
Bank of America Corp's Merrill Lynch unit, Barclays Plc and Morgan Stanley called the service's application to put the injunction on hold woefully inadequate, saying the two emails it produced that canceled subscriptions did not signal its certain demise.
Glenn Ostrager, a lawyer representing Theflyonthewall.com, declined to comment.
Last week, Theflyonthewall.com asked U.S. District Judge Denise Cote to lift her injunction requiring it to wait two or more hours before publishing analyst research from the three banks.
The Summit, New Jersey-based service said the order gives competitors an unfair advantage, raises issues under the First Amendment to the U.S. Constitution, and subjected it to a day-to-day challenge to remain in business.
Analyst research can move stocks higher or lower, and be critical to traders as well as the news media they depend on for fast, and often instantaneous, news dissemination.
In their filing, the three banks said Theflyonthewall.com failed to show it is likely to win its appeal, or that the two emails necessarily foreshadow its demise.
For a service with thousands of subscribers, this evidentiary showing falls far short of demonstrating that Fly's business cannot survive unless the court stays or modifies the injunction, the banks said. Fly may suffer some economic loss pending resolution of its appeal, but reduced subscription revenue is not tantamount to irreparable harm.
Theflyonthewall.com asked for the injunction to be lifted while it appeals to the U.S. 2nd Circuit Court of Appeals in New York. Alternatively, it sought permission to report research first published by Bloomberg LP, CNBC television, Dow Jones Newswires, The New York Times, Thomson Reuters or The Wall Street Journal.
Theflyonthewall.com has said it employs 30 people, and charges $50 a month, or $480 annually, for its services.
The case is Barclays Capital et al v. Theflyonthewall.com Inc, U.S. District Court, Southern District of New York, No. 06-04908.
(Reporting by Jonathan Stempel; Editing by Richard Chang)