Bogus ‘Steve Jobs heart attack’ story may have been prank rather than fraud
Officials now believe the fake news story about Steve Jobs’ health which caused a brief slump in Apple’s share price was the work of an 18 year old prankster. It appears he or she didn’t capitalise on the scare through buying and selling stock.
Bloomberg quotes two people “with knowledge of the matter” who prefer not to be identified as saying the investigation is ongoing but there’s currently no sign of trading records showing the offender benefited the news. Neither Apple nor the Securities and Exchange Commission (which regulates stock trading) is commenting on the report.
Though it would have been easy to write the bogus report off as the prank it now appears to be, the sheer numbers involved made an investigation a must. In the 12 minutes between the ‘story’ of Jobs suffering a heart attack appearing on CNN’s user-created news section and Apple issuing an official denial, Apple’s stock price dropped by more than five percent, temporarily wiping $8 billion from the company’s value.
Were it a deliberate attempt to manipulate the stock price, the offender could (with perfect timing) have made a profit of more than 10% by buying at the peak (or technically trough) of the panic, then selling once the price recovered. Such behaviour is a serious crime and a similar case has already led to a jail sentence of almost four years.
The fallout from the original incident has yet to settle. CNN is refusing to change its policies on its ‘iReport’ site which allows users to post ‘citizen journalism’ stories without verification. Indeed, much of the heat has now switched to Silicon Valley Insider, a tech website which picked up the CNN report and ran it before the denial. It’s certainly likely that gave the story much more attention than if it had remained limited to the iReport site.
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