Thursday, October 23, 2008

Fake Jobs Heart Attack Story Posted By Teen

Bloomberg News is reporting that the fake Steve Jobs heart attack story posted earlier this month on CNN's iReport was posted by a teenager who doesn't appear to have posted it to manipulate the company's stock price.

The U.S. Securities and Exchange Commission has been examining the 18-year-old's motives after the article on CNN's sent Apple shares down as much as 5.4 percent Oct. 3. The Bloomberg report, citing sources who declined to be identified because the probe isn't public, says "the agency hasn't unearthed any trading records that show he benefited from the drop."

As we reported earlier this month the SEC has been looking into the possibility that the story was posted as a manipulation of the stocks prices. The posting which was originally posted at iReport was picked up and reposted by Henry Blogget over at Silicon Alley Insider. A move which led more credibility to the story, effectively throwing more fuel on the fire and causing it to quickly spread around the web. Which in turn caused more and more investor uncertainty.

The text of the posting read:
Steve Jobs was rushed to the ER just a few hours ago after suffering a major heart attack. I have an insider who tells me that paramedics were called after Steve claimed to be suffering from severe chest pains and shortness of breath. My source has opted to remain anonymous, but he is quite reliable. I haven’t seen anything about this anywhere else yet, and as of right now, I have no further information, so I thought this would be a good place to start. If anyone else has more information, please share it.
The so-called citizen-journalist article raised investor concern that Jobs's health was in danger. Thus creating a sell off that cut Apple's market value by at least $4.8 billion before a spokesman for Apple could publicly denounce the reports.

An SEC manipulation case would probably hinge on the writer's intentions, said Michael Missal, a former enforcement lawyer at the agency now in private practice at K&L Gates LLP in Washington.

"If the posting wasn't directly related to the purchase or sale of a security it's questionable the SEC would have jurisdiction," he said. "That's not to say some other agency of the U.S. government couldn't take action if it felt a law was violated."

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