US regulators open investigation into UAL stock crash
13 Sep 2008
The recent UAL stock fiasco may have far reaching consequences for online reporting in general as American securities regulators are reported to have opened a preliminary investigation into the matter.
The US Securities and Exchange Commission is looking into whether there was any improper behavior behind the release on Monday of a 2002 Tribune Co news story about the bankruptcy filing, sources said.
The story appeared over the weekend on an inner page of the website of Tribune's South Florida Sun-Sentinel newspaper in Fort Lauderdale. Google News then featured it in its search results, where it was discovered by Miami Lakes, Florida-based investment firm Income Securities Advisers.
The company's stock price dropped 76 per cent to $3 after the article was later posted on the Bloomberg financial news service. It later recovered, but not before leaving several shareholders, who sold at low prices, ruing at their misfortune. (See: Six-year old bankruptcy news sends UA plummeting)
The inquiry is in its early stages and may not evolve into a full investigation, a person familiar with the matter said. However, the SEC declined to comment. The Tribune was also not forthcoming on the matter.
A spokeswoman from UAL said, "Our investigation as to how and why this happened is ongoing. It would be inappropriate for us to comment on any aspect of the investigation while it is under way."
On Wednesday, Tribune blamed technology owned by search engine company Google Inc for treating the outdated story as new. Tribune said in a news release that it had identified problems with Google's "Googlebot" technology months ago and asked the company to stop using it to "crawl" for stories on its website. (See: Tribune blames Google for confusion over old UA report)
However, the software giant wasn't willing to take the blame. Google spokesman Gabriel Strickler said, "Our mission is to organise the information and make it accessible and usable. Their mission is to create that information. The onus is on the publishers to make sure that the information is accurate."