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To: Arcane Lore who wrote (3702)	4/17/2000 9:51:00 PM
From: Arcane Lore	Read Replies (1) \| Respond to of 3795

Interesting BusinessWeek story by Marcia Vickers: Investors, Beware the Press Release The right spin--or even a lie--can make stock prices soar On Apr. 8, the Securities & Exchange Commission filed a suit against a Los Angeles tree trimmer, Stephen Sayre, for posting fake press releases on message boards on behalf of eConnect, a micro-cap Net stock. The suit alleges that Sayre put out phony 'buy recommendations' under the name Independent Financial Reports and posted them on Internet message boards. Those press releases were also distributed by Business Wire, a paid Internet news service, and ended up on news services like Bloomberg and investor Web sites like Marketwatch.com and TheStreet.com (TSCM). The stock traded as high as $22 a share on Mar. 9 and is now trading at less than $1 a share. 'We're pleased that the SEC is helping us guard information we're distributing to consumers,' says a Business Wire spokesman. An eConnect spokesman denies that the company has any relationship with Sayre. FAST AND LOOSE. Once a relatively mundane communications device, a press release now has the might to dramatically drive the price of a stock. As a result, more companies are designing press releases with that goal in mind. But it's not just edgy or pushing-the-truth headlines from lesser-known companies that are designed to spike share prices. Stock analysts say established companies are also playing fast and loose with press-release language, especially those involving earnings reports. They may exclude entire unprofitable subsidiaries, or leave out key information--such as certain losses--in order to appear rosy to investors. This has captured the SEC's attention. 'While we don't regulate press releases, we are on guard for fraudulent and manipulative statements,' says Chris Ullman, an SEC spokesman. But even the SEC admits this is a gray area and difficult to police. To be sure, stocks have always risen or fallen on news, but the Internet has fundamentally changed the way news is delivered. Average investors now get 'news' over the Internet as soon as--or in some cases before--it is posted on traditional wire services such as Dow Jones & Co. (DJ) or Reuters Group PLC (RTRSY). But often the 'news' is merely paid press release distributed through Internet news services such as PR Newswire and Business Wire. That's why many companies, especially Net-related and biotech companies that trade more on promise than profits, are able to put out a steady stream of releases to pump up their stocks. 'Investors are increasingly putting as much credence in paid releases posted on the Internet as they do in real journalism,' says Gerald S. Schwartz, president and CEO of G.S. Schwartz & Co., a New York public-relations firm. Some companies are considered press-release 'blasters'--they put out a press release almost every day. 'Companies create questionable new 'divisions,' 'mergers,' and 'products' just to stay on investors' radar screens,' says Robert V. Green, an analyst at financial Web site Briefing.com Inc. [...] businessweek.com

To: Arcane Lore who wrote (3702)	5/31/2001 2:15:24 PM
From: Arcane Lore	Read Replies (2) \| Respond to of 3795

Thursday May 24, 6:48 pm Eastern Time Web firm dispute reopens news hoax concerns By Daniel Sorid NEW YORK, May 24 (Reuters) - Business Wire, one of the largest distributors of corporate announcements, has been snagged by a bitter internal conflict at a tiny New York technology company in a dispute that rings of the press release hoax last year involving Emulex Corp. (Nasdaq:EMLX - news) On Monday, San Francisco-based Business Wire published a statement from Streamedia Communications Inc. (Nasdaq:SMIL - news), whose stock is traded on the Nasdaq for just 23 cents, declaring the ``expiration'' of its chief executive's term and the return of its one-time chairman. Business Wire published a second release on Wednesday from the company, a Web services provider, claiming the first release had been unauthorized and contained ``significant misrepresentations of important facts'' concerning Streamedia. The first release was authorized by Streamedia's former chairman, Gayle Essary, and the second by the chief executive, Henry Siegel. On March 12, Streamedia released a statement that said its board had terminated Essary as director and vice president of the company, effective March 9, ending his involvement with Streamedia. Business Wire President Larry Lokey said it has now banned the company from its service until the power struggle between Essary and Siegel has been settled. It is also investigating the matter, Lokey said. But the fact that two contradictory releases from the same source remain on the record has troubled some experts on the media. ``It sounds like there should have been a lot more security at that level,'' Sreenath Sreenivasan, a professor of new media at the Columbia University Graduate School of Journalism, said. ``You expect it to be true if it's on a press release.'' Meanwhile, Lokey said Business Wire has policies in place to keep illegitimate releases off its wire, but that it cannot, ultimately, be held responsible for the absolute veracity of each release. ``We provide the rough news,'' he said. ``The news media then receive it and then they verify it.'' But even a single false press release can have brutal consequences, as the Emulex scandal showed. In August of last year, a 23-year-old college student staged one of the largest Internet financial hoaxes by issuing a false press release over Internet Wire, a minor player in the distribution of media releases. The stock of Emulex, a technology company traded on the Nasdaq, tanked after the release was picked up by several news wires, and many investors took major losses as a result. The student, Mark Simeon Jakob, netted hundreds of thousands of dollars in profits. The student pleaded guilty to manipulating the stock in December. But the scandal led to questioning about the validity of the system of issuing press releases through third parties. News wire services and other media outlets rely on press releases as a major source of news, and investors regularly buy and sell stock based on a media release's statement. In the Streamedia dispute, the Monday press release from the company stated that Essary ``has returned'' to facilitate an ongoing merger ``following the expiration of the term of Interim President/CEO Henry Siegel.'' That press release was written by Essary. Siegel, who in a recent company filing to U.S. regulators was listed as the CEO, said Essary lacked any authority to speak for the company in a press release. Essary, in an interview, said he was authorized to issue the release. Business Wire's Lokey summed it up this way: ``It's the 'he said, she said' type of thing. We are a middle man carrier. biz.yahoo.com