The release was distributed by an online news service that believed it was getting information from a company representative. Major print and broadcast financial outlets immediately picked up the misinformation. This is not the first time that the Internet has been used to distribute misleading information about a company. A fake press release was posted on a message board earlier this year, warning that Lucent Technologies would not meet its earnings expectations. And, last year, an employee at PairGain Technologies pleaded guilty to two counts of securities fraud after posting a phony news article on a Web site that was meant to look like a major news service.
Emulex shares have a history of being very volatile.
It's the kind of stock that is loved by short traders people who try to profit when the price of a stock declines and investors who play in the fast-moving options market. Officials are already looking into unusual options activity for Emulex shares. There are lessons to be learned from the Emulex caper. Everyone with a computer has access to the sites that distribute news releases. I visit them daily.