Categories: OLD Media Moves

SEC cracks down on fake news designed to pump stock prices

The Securities and Exchange Commission announced Monday a crackdown against alleged stock promotion schemes where writers are secretly paid to post hundreds of bullish articles about public companies on financial websites.

Jonathan Stempel of Reuters writes, “Twenty-seven individuals and entities, including a Hollywood actress, were charged with misleading investors into believing they were reading ‘independent, unbiased analyses’ on websites such as Seeking Alpha, Benzinga and Wall Street Cheat Sheet.

“According to the SEC, many writers used pseudonyms such as Equity Options Guru, The Swiss Trader, Trading Maven and Wonderful Wizard to hype stocks.

“The regulator said had it identified more than 450 problem articles, of which more than 250 falsely said the writers were not being paid.

“‘This is different from the fraud cases that you usually see us bring,’ Stephanie Avakian, acting director of the SEC enforcement division, said on the conference call.

Read more here.

Chris Roush

Chris Roush was the dean of the School of Communications at Quinnipiac University in Hamden, Connecticut. He was previously Walter E. Hussman Sr. Distinguished Professor in business journalism at UNC-Chapel Hill. He is a former business journalist for Bloomberg News, Businessweek, The Atlanta Journal-Constitution, The Tampa Tribune and the Sarasota Herald-Tribune. He is the author of the leading business reporting textbook "Show me the Money: Writing Business and Economics Stories for Mass Communication" and "Thinking Things Over," a biography of former Wall Street Journal editor Vermont Royster.