SEC looking into United Airlines story

Kara Scannell of The Wall Street Journal reports that the Securities and Exchange Commission has opened a preliminary investigation into how a six-year-old story on United Airlines resurfaced on the Internet, causing is stock to drop.

Scannell writes, “‘Anytime anyone spreads false information over radio, TV, Internet message boards or chat rooms, about a public company that will raise questions as to whether someone is committing securities fraud,’ said John Reed Stark, head of the SEC’s office of Internet enforcement. Mr. Stark declined to comment on whether the agency is investigating the UAL posting.

“The UAL glitch has sparked a round of finger-pointing. Tribune blamed Google’s automated news collection for misreading an archived story about UAL’s 2002 bankruptcy-court filing as fresh news. In its latest explanation, Tribune said a single visit during a low-traffic period early Sunday morning pushed the undated story onto the list of most popular business news of its South Florida Sun-Sentinel newspaper’s Web site. From there, it was picked up by Google and was also distributed to subscribers of the Bloomberg financial-news service.

“‘Our investigation as to how and why this happened is ongoing,’ a UAL spokeswoman said. ‘It would be inappropriate for us to comment on any aspect of the investigation while it is under way.’ A spokesman for Tribune declined comment on the SEC inquiry. A Google spokesman said the company hasn’t been contacted by the SEC.”

Read more here.