I was fascinated by the recent Twitter hoax in which shares in the social media company jumped after a published (fake) Bloomberg news story suggested that Twitter had received a $31 billion takeover bid. The article was published cleverly on Bloomberg.market rather than the real Bloomberg.com.
Though Bloomberg eventually announced that the Twitter story was fake, and was not affiliated with the financial news company’s site, takeover speculation has been swirling around Twitter in recent months, so investors were quick to act on the bogus report. Twitter shares spiked over 8 percent as a result of the fake story (before Bloomberg’s correction) and options activity surged as well.
The Twitter/Bloomberg hoax is actually quite similar to a 1999 market manipulation impersonation hoax concerning a stock called PairGain and conducted with an eerily similar modus operandi. The PairGain hoax was followed by a string of other comparable online market manipulation schemes similarly using bogus websites and message board postings, all of which I chronicle in an article CybersecurityDocket.com just published today, entitled, “Back to the Future: The Bloomberg/Twitter Impersonation Hoax.”
The article includes virtual snapshots of the actual phony websites and message board postings used in all of the schemes, which illustrate first-hand the efficacy and evolution of these scams (which may indeed be experiencing a serious resurgence.)
As an aside, the SEC will not likely lash out at Bloomberg, Twitter or any of the other intermediaries and media exploited in these online impersonation hoaxes; because even the SEC is not immune from being used as part of a hoax. Just a few months ago, shares of Avon Products soared following a news release filed with the SEC that claimed that the consumer-products company was the target of a takeover bid from “PTG Capital,” an apparent allusion to private-equity firm “TPG,” whose boilerplate self-description was mimicked in the purported filing. The SEC later filed an enforcement action claiming that the false Avon report came from a 37-year-old man in Bulgaria. The SEC also charged that the Bulgarian man had manipulated stocks in a similar fashion on two previous occasions over four years.
You can link to my article here.
