03/06 America Online Criticized for Carrying Inaccurate Stock Quotes
Dulles, Virginia, March 6 (Bloomberg) -- America Online Inc.
is under fire for reporting inaccurate stock prices of companies on
its network.
The online service said any problems with its information on
stock activity stem from its supplier, Standard & Poor's Corp. An
S&P spokesman wasn't immediately available for comment.
Albuquerque, New Mexico-based Ben Ezra Weinstein and Co.,
which helps companies file public offerings through the Internet,
said AOL listed its closing stock price on Tuesday at a tenth of
the correct price and showed trading of 1.3 million shares instead
of the actual 30,500.
Owings Mills, Maryland-based Carnegie International Corp. said
AOL yesterday showed 2.3 million of its shares were traded --
instead of the actual 27,800 shares -- when the company only has
3.5 million unrestricted shares outstanding.
``We're an up-and-coming company and this kind of stuff
affects us greatly,'' Carnegie Treasurer David Pearl said. ``Some
people do make decisions to trade based on information they receive
on the Internet.''
Only a few executives at the company own enough stock to
generate trading of 2.3 million shares in a day, Pearl said,
adding, ``we had a telephone call from one of our shareholders
wondering whether one of our insiders fled the country. We
explained that it's a mistake, but we shouldn't have to be doing
that.''
Carnegie shares, which closed at 1 1/16 last Friday, tumbled
as low as 9/16 in morning trading today before rebounding to 1 1/16
in afternoon trading. Ben Ezra Weinstein shares lost a third of
their value from Monday to Wednesday.
In an interview, AOL spokeswoman Trisha Primrose said the
Dulles, Virginia-based company receives its stock information
directly from Standard and Poor's.
``We don't make the stock prices,'' she said. ``All the
information is computer translated and occasionally the information
we get is wrong.'' She said S&P transmitted the data improperly to
AOL.
Mike Weinstein, Ben Ezra Weinstein's chief operating officer,
said AOL didn't deny the problem when he complained: ``AOL just
acknowledged that they've known about the problem for a few weeks
but couldn't correct it until they got a certain software. When I
asked AOL to put that in writing, they wouldn't.'' Ben Ezra is
reviewing its legal options against AOL, Weinstein said.
The software bug cuts the stock price to 1/10th its value and
overstates trading, Weinstein said. According to Weinstein, AOL
said it could offer an immediate fix for either the inaccurate
stock price or the trading, so it decided to fix the stock price.
The incorrect information may make investors assume
something's wrong with a company, Weinstein said. When investors
see such strange numbers in a company's stock, ``this scenario
tells you they're toast. We've been getting calls day and night.''
Carnegie International also said its stock was misquoted.
Officials said they have checked other reporting services that get
their information from S&P and found only AOL's information was
incorrect.
``We believe the problem is with AOL and we have asked them to
fix the problem and provide a screen saying there have been errors,
and they haven't done either,'' said Richard Gershberg, Carnegie's
attorney.
The mistaken quotes have spurred unusual activity in Carnegie
stock. ``The actual real volume has been trading in a day what we
used to trade in a week,'' because of AOL's inaccurate quotes,
Pearl said.
Since Tuesday, Carnegie has been randomly sampling different
companies and checking for inaccurate stock quotes on AOL. All of
the companies reported incorrectly were small companies traded over
the counter, ``where these misreporting errors are very serious,''
Pearl said.
Carnegie is a holding company with two subsidiaries, one that
does sales work for credit-card issuers and one that makes special
gripping devices. |
