Anything that enables people to do good things is going to enable people to do bad things. The news service Bloomberg had already filed a civil suit against whoever the hoaxster turned out to be. Lashinsky says small investors need to be aware that it doesn't take much to move the share price of many small companies. But, they're going to make mistakes not only from a technical perspective, but also from the perspective of getting taken in by hucksters and manipulators. Pairgain's stock went up 32 percent soon after the fake news story was posted about the company being a takeover target.
Securities fraud can mean up to ten years in jail and a million dollar fine.
Some analysts see some air being let out of a bubble here. Charles Schwab reported today that its online business helped the company more than double its profits in its last quarter. Still Schwab shares tumbled 10.3 percent. At a time of rising nuclear tensions between India and Pakistan, a growing political crisis in India is threatening that country's fragile economic recovery. A parliamentary vote Saturday will decide the fate of the ruling coalition government.