Report: SEC looks into posting of old United story

Updated 4:50 p.m. PDT with Google comment.

Officials at the U.S. Securities and Exchange Commission are wondering if there was any improper conduct behind the online release last weekend of a 6-year-old news story that lead to a 75 percent drop in the stock of United Airlines on Monday, according to The Wall Street Journal (subscription required).

The SEC has opened a "preliminary inquiry" into the online distribution of a Chicago Tribune article from 2002 about United Airlines' bankruptcy filing, people familiar with the matter said.

The Tribune Co. said in a statement on Wednesday that it believes a single visit to the archived story on the site of its South Florida Sun-Sentinel newspaper during a low-traffic time period resulted in the computer system displaying it under a tab titled "Popular Stories Business: Most Viewed."

The article was then picked up by Google News and displayed with no indicate of the original date of publishing. It was later distributed by Bloomberg.

Google's automated search agent "Googlebot" misclassified the article because it is unable to differentiate between breaking news and frequently viewed stories on the newspaper Web sites, the Tribune said, adding that it had asked Google to stop crawling its sites month ago, but the process had continued.

Asked for comment, Google spokesman Gabriel Stricker said: "The claim that the Tribune Company asked Google to stop crawling its newspaper Web sites is untrue."

Google's crawler had no reason to suspect that the article was old, according to a Google News blog that was first posted on Monday and updated on Wednesday. "The article failed to include a standard newspaper article dateline, but the Sun-Sentinel page had a fresh date above the article on the top of the page of "September 7, 2008" (Eastern)," it said.

This is the latest in a series of false market rumors. The SEC brought a case earlier this year against a short-seller who allegedly spread false information about a pending takeover, and is also investigating short-selling of Bear Stearns and Lehman Brothers stock, according to the Journal.

John Reed Stark, head of the SEC's office of Internet enforcement, declined to comment on whether the agency is investigating the posting about United Airlines, which emerged from bankruptcy in 2006.

"Anytime anyone spreads false information over radio, TV, Internet message boards, or chat rooms about a public company that will raise questions as to whether someone is committing securities fraud," he told the paper.

[humanssssss]

SEC is a bunch of thugs and idiots. In the age of information, people should have the right to freedom of speech. Maybe they haven't learned about the Constitution. It states exactly the problem we have today with the tyranny of government controlling freedom of speech. This freedom is fundamental to our civil rights as human being.

Freedom of speech means you can say anything you want. It does not mean people have to listen to you. If people who listen to you and act on your right to freedom of speech. That's the people's problem. Why is it the problem of the person who gave the speech? When people don't take responsibilities for their own actions upon speech of others who they have no clue of its source and make millions and billions dollars bet, who's fault is it?

Why is the SEC involve in the actions of stupid investors? Protectionism will drive the financial markets down further. It's been proven that if the free market is not allow to adjust itself, the consequences will compound and will create the next Great Depression.

And one more thing, people with money are the people who invest in the stock market. People who are poor save emergency reserve to buy food and if they have money left, they will invest.

SEC should go read up on Adam Smith "Wealth of the Nations". Idiots today who control the financial markets are what is ruining our country.

[MCOjerry]

Um...I think it has more to do with what your intent is. If there is intent to defraud, or devalue by posting misleading information, that's wrong. Certainly you can say anything you like, within reason; if you do it with the intent of causing harm to others and/or gain for you...there's a problem.

By the way, I'm not "people with money" and I invest in the stock market. You really make no sense, can your comments are pretty useless.

[ghostofitpast]

I think this incident goes far deeper than the question of freedom of speech; I have tried to plumb those depths at

http://therehearsalstudio.blogspot.com/2008/09/absence-of-judgment.html

[danielz40]

There are also limits on Freedom of Speech, so it is not purely free. Limits such as defamation, product liability, hate speech, denial of the holocaust, etc.
It includes intent to harm. You can't yell "Fire" in a theater. You probably just as well can't yell "United Bankrupt" either. Harming people's pocketbook seems the same as benefitting your own.

[Sugiarto Setiabudi]

Good news ,SEC please go ahead