Ethics Newsline®

Apple stock took a dive after bogus report; Securities and Exchange Commission is probing possible market manipulation

NEW YORK
CNN’s plunge into so-called citizen journalism raised ethics questions and more than a few eyebrows at the U.S. Securities and Exchange Commission (SEC) after the cable-news outlet posted what turned out to be a false report claiming that Apple CEO Steve Jobs had suffered a heart attack.

Bloomberg reports that the event is viewed by many as an example of the need for news organizations to verify content generated by users before it is published.

According to Bloomberg, “citizen journalism” has been adopted by a variety of news outlets in an effort to stretch resources and appeal to online audiences.

CNN’s iReport site broke the bogus Apple story last week — and before it was corrected, Apple’s stock went into a tailspin, losing about 11 percent of its value, reports the San Jose Mercury News.

iReport — whose motto is “Unedited. Unfiltered. News.” — is a site where anyone can post news reports.

Apple quickly denied the story and iReport took it down, according to the Chicago Tribune. Apple stock rebounded later in the day, but closed down in a general market sell-off.

In the aftermath, the SEC opened an investigation of the false report to determine if it was a deliberate attempt to manipulate the market, according to technology network ZDNet.

Sources: Bloomberg, Oct. 4 — Chicago Tribune, Oct. 4 — ZDNet, Oct. 3 — San Jose Mercury News, Oct. 3.

For more information, see: Related Newsline story, Sep. 8 — Related Newsline story, June 16 — Related Newsline story, May 19 — Related Newsline Commentary, Feb. 11 — Related Newsline Commentary, Jan. 22.