back to article United 'bankruptcy' points to new stock scam techniques

Market watchers are trying to unravel how a six-year old story suddenly rose to prominence, hammering the share price of United Airlines earlier this week. A 2002 story of a bankruptcy filling by UAL was pushed into the most viewed business story category on the South Florida Sun Sentinel's Web site on Sunday morning. The …


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  1. ratfox

    My sympathies to UA

    Having something like this happen to you is more or less akin to being hit by lightning in the middle of a beautiful day.

    Congratulations to the clever guys who managed to buy at $3. The stock is back up at $10, though it's still lower than the previous level of $12.

    Indeed, fake bad news might come up more and more, considering it's much easier to halve the value of a stock in one day than double it... Doesn't say much for the system as a whole, though.

  2. Steven Raith

    very cool...

    From a logistical standpoint that is - never heard of anyone trying something like that before.

    Probably fairly easy to stamp out though - ensure someone actually reads the articles before they send them to the trade floor...

    Steven R

  3. Michael
    Black Helicopters


    I wonder if it's even technically illegal. Clearly employing a botnet COULD be considered illegal. The action of shorting the stock as it falls due to actions you took, however, now that's gray area. One the one hand, you've artificially manipulated the market to your benefit, but on the other hand, if you just up and bought a boatload of stock, you'd push the price up that way, manipulating the market that way as well.

    The question becomes "at what point is manipulation of the market illegal?" Particularly when the manipulation actually occurs OUTSIDE the market, on a media website?? IANAL, but it sure seems to me like if I borrowed stock, sold it at $12 a share, pushed the big-red-botnet-button (causing the stock to plummet), bought back the shares at $3 each, and returned the stock to the lender, pocketing the difference -- it sure looks like the only offense would potentially be the use of the botnet. But a) botnet usage is not necessarily illegal, and b) a botnet wouldn't necessarily be needed to game the system to get the article to float, causing the stock to tumble. So on the surface of it, it looks like this could be done completely legally, which is an interesting thought.

    mine's the one with the laptop controlling a botnet and running trading software at the same time...

  4. David

    @ Michael

    It's insider trading

  5. Anonymous Coward

    Illegal - at least in in the UK

    <extract>Seven types of behaviour can amount to market abuse – see below for more detail. The examples illustrate the abusive behaviour the Code covers.


    6. Dissemination – giving out information that conveys a false or misleading impression about an investment or the issuer of an investment where the person doing this knows the information to be false or misleading.



    AC as I work in the finance sector

  6. Trevor

    the Minimal Risk

    If it was intentional and the perpetrators were smart, they most likely did not short the stock. The most likely bought it while it was down low after the news hit. The reasons are that shorting the stock before the crash will in hindsight look like you knew about the crash and is a financial risk if the article resurrection did not work. Buying when it is low like $5 is hidden in the confusion and can be explained away by saying you realized the article was old and were picking up a bargain stock. Sell it at $10 when it recovers and walk away with the profit.

    Expect to see this trick carried out again, most likely by copycats that wont do as good a job as this one.


  7. Frank Sattler
    Paris Hilton

    I would imagine...

    that this happens more frequently than one would imagine, although usually with less dramatic results...

    In fact, it happened to me once as well. I used to use the "most read" and "most emailed" links on the Beeb's News site to get a quick overview of breaking news. On day I clicked on a link in the "most read" box and only when I was halfway through the article did I notice a reference to an event that I knew was a few years back. Only then did I look at the (easily overlooked) date stamp, which stated that the article I was reading was almost 5 years old.

    It sticks in my mind, because since then I religiously check the date of news articles.

    Since it's quite fashionable to have these "most read" links on news sites these days, I can see how this could easily be exploited using a smallish botnet, or even a number of very bored people clicking repeatedly on a link. And once the ball starts rolling, it's difficult to stop: once an article is prominently displayed in the "top five stories" list of a news site, more people will click on it, meaning it'll get propagated upwards, making it even more prominent, which will result in spiders picking it up and promoting it elsewhere.

    Paris, because she's got things prominently on display.

  8. Anonymous Coward

    The lazy and the stupid in perfect harmony

    "Weitman added that hits on the story had spiked on Sunday and Monday morning. Coincidentally United filed for bankruptcy protection on a Monday in December 2002.

    That factor goes some way to explaining why neither Income Securities Advisors, which posted the summary, nor Bloomberg, picked up on the mistake."

    Seriously? Investment advisors do google searches and type out the top 5 hits without even vague curiousity? This then gets into Bloomberg with out anyone thinking "Is that true, should we phone UA's press office?" Then investors see the news and dump stock in a wild panic, also with thinking.

    Nice to see a chain of credulous fools hold the global economy together.

  9. Anonymous Coward
    Anonymous Coward

    Sudanese goat sex

    This reminds me of the BBC story "Sudan man forced to 'marry' goat" that regularly floats to the top of the "most read" column there, presumably thanks to some mischievous links.

  10. Tony
    Paris Hilton


    If Google simply made it compulsory for its trusted sources to include a publish date, this could be avoided, yes?

  11. Anonymous Coward
    Anonymous Coward

    @AC - Illegal - at least in in the UK

    The kind of manipulation we're talking about is also illegal in the US. It's a thorny problem for the SEC to root out and prove manipulation.

    "Expect to see this trick carried out again, most likely by copycats that wont do as good a job as this one."

    Good prediction. New laws and updated forensic methods are sure to follow.

  12. Tom Silver badge

    Isnt this common practice

    Its seems that regulary completely incorrect information is published by bio botnets called the tabloids. This information is often generated by hedge funds - and as they work for the rich these actions are defacto legal.

  13. Ian Coutts

    Stock Market = Gambling

    What's really cruel is that the traders made a small fortune both on the sell-off and the buy-back. Brokers LOVE an active stock. They could care less whether it's going up or down. They make money both ways, even while not knowing whether the news is true or false. Just like Las Vegas never has a bad day.

  14. Anonymous Coward
    Thumb Down


    Unnecessary. Like AC says above, if the 'analyst' was doing his job and actually researched stuff for 5s before posting the link on, this wouldn't have happened. This is just the same level of sloppy internet journalism as the infamous Times obit for Ronnie Hazlehurst.

  15. Kevin Pollock

    Happens every day thanks to Google Alerts

    I agree that the deliberate use of a botnet probably makes this a form of insider trading. Except one could argue that the news was already in the public domain!

    This happens to me almost every day - I receive Google alerts that turn out to be "old" news. I'm not sure how or why this happens but Tony hit the nail on the head - there needs to be some general best practice for the news industry to use date and time stamps.

  16. Vicente

    Not exactly a new attack

    This attack is not new, and the ideas has been floating for some time.

    Any news website with xss flaws can be used as explained in this paper:

  17. Simon Painter


    Yeah, google forcing conditions on the sites it indexes for news... nice idea but most of them would just remove all dates because they don't *want* to be indexed and provide people with news for free when they could be forcing them to register or buy antiquated paper versions of their news websites.

  18. Steve

    Re: Illegal - at least in in the UK

    "6. Dissemination – giving out information that conveys a false or misleading impression about an investment or the issuer of an investment where the person doing this knows the information to be false or misleading."

    But are they disseminating anything? They owned none of the media outlets, wrote none of the articles and didn't didn't give out any information. All they did was repeatedly *view* an article which was then (correctly) listed by the site as 'most viewed'.

    They relied on the predictable media frenzy to concentrate on the word 'bankruptcy' and not look into it further.

  19. David Shepherd

    BBC (old) news

    Mentioned this in another comment yesterday but now found the BBC news articles.


    to explain why "Hotmail about to charge for email" hit the most read listings several years later. (I wonder it this will now propel this article up the rankings :-)

  20. Anonymous Coward
    Anonymous Coward

    Re:The lazy and the stupid in perfect harmony

    AC - If you are blaming Bloomberg then why aren't you blaming Google? Both are news aggregators. Both also removed the story when notified (Bloomberg within 8 minutes of its release I believe). It is the researchers who really come out of this looking badly. And also the Sun Sentinel for not dating their story.

  21. fajensen Silver badge

    Err - It's only illegal for "us", not "them"!


    6. Dissemination – giving out information that conveys a false or misleading impression about an investment or the issuer of an investment where the person doing this knows the information to be false or misleading.


    Just consider the Fannie Mae / Freddie Mac debacle:

  22. Daniel
    IT Angle


    Questionable I would think, arguably your not giving out any information that is false, if you own the botnet (as in legally) then how is it illegal to access a website? If anyone was considered to be commiting a crime surely it would be the news networks which ran with it!

  23. DZ-Jay

    Re: Re: The lazy and the stupid in perfect harmony


    I believe the original Anonymous Coward was too referring to the researcher. His comment:

    "Investment advisors do google searches and type out the top 5 hits without even vague curiousity?"

    seems to imply that searching in Google without critical thinking or actual analysis (read: research) is, well, lazy and stupid.

    I agree.


  24. Michael Wojcik Silver badge

    most read != most important

    Frank Sattler wrote above: "Since it's quite fashionable to have these "most read" links on news sites these days..."

    Yes, because apparently many of the instant-news junkies (this is not directed at you, Frank) aren't bright enough to do anything other than read whatever their fellow instant-news junkies are reading.

    That's what's great about this exploit - it leverages the stupidity of the crowd.

    I notice we're hearing less nonsense about the "wisdom of markets" these days, though.

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