Wednesday, April 24, 2013

A Short-Lived Hoax

A group of young hackers from Syria,
Who set off a market hysteria,
Confounded the Street
With a single, fake tweet;
One may ask: were their motives ulteriah?

If their hoax has turned out to conceal
An elaborate insider deal,
They'll have done an offense
For which there's a sense
Of prosecutorial zeal.

They'd have carried it out with impunity
If they'd sunk the financial community,
As there's many a name
That's committed the same
And seems to get off with immunity.

Shortly before 1:08 pm yesterday, a tweet from the @AP account reported: "Breaking: Two explosions at the White House and Barack Obama is injured."  Two minutes later, the AP issued a denial, explaining that their account had been hacked.  There was no harm from this malicious and tasteless hoax, except that the US stock markets experienced an instant, $200 billion loss in value, which was quickly recovered after the official denial.  The Wall Street Journal reports that "a group identifying itself as the Syrian Electronic Army took responsibility for the fake AP message. The group, which describes itself as 'a group of enthusiastic Syrian youths' who support Syrian President Bashar al-Assad, recently has targeted other media organizations." So much for youthful enthusiasm, but what are the legal consequences of this prank, especially unnerving in the light of the Boston Marathon bombing?

Well, reports the Journal,"Securities and Exchange Commission officials are looking into trading activity that took place in response to the AP tweet," since the hackers or their accomplices could have planned the market-moving news in order to buy on the dip and sell for a quick profit. It's a reminder that insider trading remains one of the few financial crimes for which the accused can expect to have the book thrown at them. If they are caught and prosecuted, those enthusiastic, electronic Syrian youths have only themselves to blame for aiming too low. In the much larger crime of widespread mortgage fraud which precipitated a global financial meltdown, there will apparently never be any prosecutions of top figures.

1 comment:

  1. And, of course, we shouldn't forget that Congresspeople are now, once again, allowed to trade on their insider knowledge with almost no effective transparency or fear of punishment.
    For me, that makes it extremely difficult to take any insider trading charges seriously.


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