Late last week the Securities and Exchange Commission announced charges against a Georgia man, alleging that he and others participated in a "market manipulation scheme." According to the SEC, the group identified companies, composed and edited rumors about those companies that had the potential to move the financial markets, established a position in those companies and then disseminated the allegedly false rumors through various electronic messenger and chat room services. The SEC complaint specifically mentions two companies - Disney and Herbalife - both of which are of interest to ordinary investors.
The alleged scheme is not new - people have been trying to move markets with false information since markets existed. But as we increasingly obtain our information from digital sources of varying reliability, it is important to remember that the information may not just be untrue - the author of the information may be trying to fool you for their own gain.
The Securities and Exchange Commission today announced charges against Barton S. Ross for his role in a market manipulation scheme in which he and several other individuals created false rumors about public companies in order to profitably trade around the temporary price increases caused by the publication of the rumors.