Palm's Nagel risks SEC wrath with OS claims

SonyEricsson denies talks

By Andrew Orlowski in San Francisco, 18th October 2003

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PalmSource's CEO David Nagel faces questions about his claims that the company is in talks to license PalmOS to SonyEricsson. The handset manufacturer has flatly denied any such talks are taking place. SonyEricsson would represent a major win for Nagel's PalmSource licensing operation.

Nagel's comments encouraged a rally on Palm stock. Company officials are notoriously wary about making such predictions, and share watchdog the Securities and Exchange Commission obliges "forward looking statements" to be carefully worded.

The boast is surprising from Nagel, a straight arrow and one of Silicon Valley's more thoughtful CEOs. Nagel's stewardship has revived Palm's fortunes and the company is finally set to separate its hardware and software into separate companies: the hardware division becoming palmOne. Palm shareholders are set to approve the split on October 28.

Was Nagel talking up the share price?

Palm had not responded to our calls at press time. A SEC spokesman told us that false statements made with the intention of manipulating the share price have formed the basis of cases in the past. "You have to prove intent," he said. As it can only pursue civil cases, SEC needs to a show preponderance of evidence. And that's something only an investigation can produce. ®

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