TheStreet.com cancels first round of contest

Louise Story of The New York Times writes Tuesday that TheStreet.com has canceled the first round of its stock picking contest “Beat the Street” due to cheating by some contestants.

She wrote, “The financial news site did not disclose the tactics of the cheats, but it said that all participants of the first contest could enter its next stock picking match. The $100,000 prize money from the canceled contest will be used to increase the amount awarded in the second contest to $150,000.

“‘Players employed trading strategies to achieve returns that could not be duplicated in the real world, thereby depriving other contestants of an equal chance to win,’ David Morrow, the site’s editor in chief, said, in part, in a Web posting to readers. ‘I invite you to participate in the soon-to-launch ‘Beat the Street 2.0’ game.’

“CNBC also ran into problems with a similar contest this spring. That contest, awarding a prize of $1 million, became a popular feature on the CNBC Web site, with about 375,000 people participating. CNBC has hired outside investigators to determine if players rigged the system by, among other tactics, trading after hours, a statement from CNBC said last week.”

Read more here. Read Morrow’s statement here.