Royal Bank of Canada invests in SCO

BayStar Capital entered the open-source spotlight last week with its $50 million investment in the SCO Group, which is embroiled in legal wrangling over Linux and Unix with IBM and Red Hat. What the companies didn't say so loudly, though, is that $30 million of BayStar's investment in SCO was from the Royal Bank of Canada, according to a Thursday regulatory filing with the U.S. Securities and Exchange Commission. BayStar itself invested the remaining $20 million.

BayStar invests in publicly traded companies with a mechanism called a PIPE--private investment in public equity. While Microsoft has used PIPEs in the past, a BayStar representative said Microsoft apparently hasn't ever participated in a BayStar PIPE and certainly didn't participate in the SCO investment.