Categories: OLD Media Moves

SEC going after fake biz news designed to boost stock prices

Erin Avredlund of the Philadelphia Inquirer writes about recent attempts by the Securities and Exchange Commission to stop fake business news stories designed to pump up stock prices.

Avredlund writes, “Regulators have lodged complaints against writers for the internet investment sites SeekingAlpha.com, Benzinga.com, TheStreet.com, Forbes.com, and several others, saying the authors were writing under pseudonyms or who did not disclose that they were promoting stocks for money.

“Of those charged in April by the Securities and Exchange Commission, 17 have agreed to settlements that include disgorgement (repayment) or penalties ranging from about $2,200 to nearly $3 million. The SEC’s litigation continues against 10 others.

“‘This was something different than what we’ve seen in a classic pump-and-dump, where typically one individual is promoting one stock. This was more organized, and we saw it as a different kind of threat,’ Melissa Hodgman, associate director of the SEC’s Enforcement Division, said of the complaints.

“Consider SeekingAlpha.com, one of the most popular websites covering Wall Street. The SEC alleges that some ‘expert’ investors writing for the site weren’t experts at all — and weren’t even writing under their real names.”

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.

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