
Twitter Stock Jumps Nearly 8 Percent on Fake Bloomberg News Post - prostoalex
http://recode.net/2015/07/14/twitter-stock-jumps-nearly-8-percent-on-fake-bloomberg-news-post/
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superplussed
Dumb question: is buying a domain, posting a hoax story about a company on
that domain, and then executing trades to take advantage of the fluctuation in
that company's stock price illegal?

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404error
I'm not sure, I wonder if The Onion has ever affected stock prices.

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justincormack
Journalism is generally exempted from securities regulations (if they are not
trading). Comedy the same I presume.

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404error
I guess this explains the disclaimer in all of Fool.com's articles. The author
of the article tends to disclose if he/she holds any positions.

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jimminy
It's actually a legal requirement as of a few years ago, for interests to be
disclosed in the case of endorsements, or critical pieces on competition. If
that interest isn't already clear.

[https://www.ftc.gov/tips-advice/business-
center/guidance/ftc...](https://www.ftc.gov/tips-advice/business-
center/guidance/ftcs-endorsement-guides-what-people-are-asking)

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Cshelton
I'm curious if the majority of the trades were executed by humans reading it
or essentially algorithms that scrape the web for articles. Also, if you
intentionally released a bogus story and benefited from the rise, you bet it's
illegal....and they (SEC) will almost certainly find you...

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nodesocket
Hate to burst your bubble, but the SEC is probably one of the most under
funded government organizations there is. They are going against billion
dollar companies and individuals, and honestly are sort of a joke.

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Cshelton
Actually, the SEC has many sophisticated tools. and on events like this,
greater attention is received. I utmost assure you from personal knowledge,
they will find you and they are most certainly not a joke. Billion dollar
companies and individuals have nothing to do with it, they have no immunity or
some secret hiding place. More often the bigger guys raise flags much quicker
and are easier to investigate. (Usually larger amounts of money)

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nodesocket
The craziest thing, is this stuff happens all the time. People are 'gaming'
the market, naked shorting, front-running, insider trading, the SEC has no
chance. You have to imagine the guys who built this fake site dropped some
cash having it done. Just imagine how much money they made when TWTR shot up
([http://i.imgur.com/AXYEebF.jpg](http://i.imgur.com/AXYEebF.jpg)).

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jedberg
Yay for automated trading! This is exactly the kind of thing that everyone
says is the danger of automated trading with NLP.

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slg
Automated trading likely made the problem worse, but I have to imagine it
started with a human. Imitating the visuals of another website on another
domain is a trick designed to fool a human as it would be trivial for a
machine to know the difference.

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joeblau
When scenarios like this happen, who actually loses money? Obviously some
person/firm made a lot of money on this story, but there has to be an entity
on the other side who also lost a lot right?

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Cshelton
As the stocks' demand rises, the price goes up. The price going up will cause
others to sell, many have a sell limit set so the trade executes
automatically.

The buyers who bought it going up thinking it will keep going, or that the
article was valid, are the losers. The price will fall back down once the
article is proven to be fraud and those buyers just lost a good amount of
basis points.

The ones who held the stock before hand and sold as it reached the peak are
the winners.

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celticninja
This second group will be the ones the SEC look into first.

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bitwarrior
Market has already corrected.

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jsprogrammer
An all knowing, or at least efficient, market would have rejected obvious spam
instead of working itself into a frenzy.

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tedunangst
I don't think the efficient market hypothesis claims that stupid people can't
exist.

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jsprogrammer
The EMH is, as far as I can tell, a tautology. It makes no _real_ claims.

The article was an obvious piece of spam/trollmanship. It was _easily_
verifiable as being a fake Bloomberg article, yet some probably believed it
was real and made trades at prices higher than what was transacting before the
article appeared.

