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AAPL Stock: 97.44 ( + 0.41 )

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Teen responsible for fake Jobs heart attack story

updated 10:55 pm EDT, Thu October 23, 2008

Teen wrote fake story

The SEC has found the author of the false internet report suggesting that Steve Jobs had suffered a major heart attack, according to Bloomberg. The 18 year old, writing under the name "Johntw," posted the fabricated story on CNN's iReport website, a portal that posts entries from "citizen-journalists" that are not affiliates or staff writers of the news company. The report allegedly drove AAPL market value down $4.8 billion in the first hour of trading, even though it was quickly exposed as a fabrication and the stock recovered most of the lost value by the end of the day.

The fictitious story suggested that an anonymous insider provided information that Jobs was rushed to the hospital after the paramedics were called because he was suffering from "severe chest pains and shortness of breath." It also claimed that he ended up in an emergency room and suffered a major heart attack.

Steve Jobs health has been the focus of attention throughout the year, starting with the WWDC keynote address where he appeared unusually thin. He had undergone surgery four years ago to remedy a rare form of pancreatic cancer. This has lead some to believe that his sickly appearance means the condition has returned.

Jobs has denied the allegations, but claims his health is a "private matter." He reported to Apple's board that the thin appearance was the result of nutritional problems from the cancer treatment, but that the cancer itself had not returned.

Jobs can be considered the "face" of Apple, and his position there is considered by many to be essential to the strong growth that the company has experienced recently and that could continue into the future. Some speculators have remained unconvinced that his health is as good as claimed. The lack of any positive change in his appearance has been considered a factor in AAPL's low stock prices through the second half of the year.

Because of the known fluctuations of Apple stock price depending on public perception of the CEO's health, the SEC had been investigating the matter to determine if a rogue investor intentionally publicized the story to profit from short selling the stock. The government branch continually watches for similar activity, especially in sensitive market times when a rumor can result in multi-billion dollar sell-offs.

So far no evidence has been found that suggests the teen was trading Apple stock or options at the time. The individual is unlikely to face prosecution from the SEC unless they can prove his intentions were to drive the share price down, although he could still be charged by other government agencies for violation of other laws.




by MacNN Staff

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Comments

  1. marmotton

    Joined: Dec 1969

    +9

    Too late

    These so-called "citizen news" web site should be shut down. The damage caused by this false report permanently added fuel to the hysteria around Steve Job's health. It's irresponsible for CNN to associate their (already tarnished) brand name to content that are created by average Americans (and I don;t mean this to be flattering).

  1. Bobfozz

    Joined: Dec 1969

    +6

    marmotton

    Agreed. This kind, you can't say other wise, is a thrill seeker and he had to know what he was doing.
    At the very least he should get a stiff fine so that people can see the result of their messing with economic conditions. Like hackers caught doing damage, few of us have any sympathy for this kid.
    I agree, I don't trust iReporting as there is NO accountability.

  1. malax

    Joined: Dec 1969

    +6

    good news

    Glad they caught him and glad it turned out not to be stock manipulation. Hopefully this will cause people to think twice before trying this. It should cut down on it a tiny bit at least. Unless it just gave more people ideas...

  1. ViktorCode

    Joined: Dec 1969

    +2

    It's okay

    If someone still beleives any blog posted info let him suffer consequnces. It is impossible for news agency to check every source, so if they don't care about their brand - let them post every little rumour and see people eventually leaving in flocks for more reliable news outlets.

    Still believe Charlie from The Inquirer? Still read tech insights from the blogs? You had it coming and no one should be punished but yourself.

  1. macnixer

    Joined: Dec 1969

    +3

    Was he motivated?

    This is a conspiracy theory but to me it looks like the kid was probably paid by someone to own the act. That way no one can say that he was motivated to create a slow down on Apple stocks and earn big time. Probably the kid was not trading but it could also be true that someone with a vested interest was and paid the kid some good money to own up.

    IMO the SEC, FBI etc. should investigate and take this kid to jail for spreading such rumors so that it would set a precedent to other kids that such irresponsible behavior is punishable. The truth will come out sooner or later.

  1. 1golfdoc

    Joined: Dec 1969

    -2

    make him an example

    i hope the sec will prosecute this punk to the fullest extent of the law. never allowed to invest, never allowed to use a computer or cell phone again. plus, leave him in an open jail cell for a few months with other smart asses, see who learns their lessons. his life should consist of minimum wage jobs for the rest of his life. there needs to be accountability in all people for their actions.

  1. CaptainBaldy

    Joined: Dec 1969

    +6

    Tools

    Instead of going after the kid who posted it, how about the tools that took this story as being real and made financial decisions off of it. This knee jerk reaction to a non substantiated story is one of the many reasons why stock traders and investors are the used car salesmen of the moment.

  1. Monstermind

    Joined: Dec 1969

    -4

    Who's editing this mess?

    "...although he could still be separate by other government agencies for violation of other laws."

    "Seperate"? How do the cops "seperate" someone? Who the h***'s writing this??

  1. testudo

    Joined: Dec 1969

    -5

    make an example

    For what? Posting a false story? If you prosecuted him, you'd half to prosecute half the people in the world who do anything on the web. h***, the editors of MacNN alone....

  1. Roehlstation

    Joined: Dec 1969

    +2

    Conflicting views

    To anyone saying that they should NOT allow sites like this to exist, I'd point you to the first amendment, BUT there are also Libel laws out there that could fall under this, along with anything the SEC might be able to bring up. I can't say I want these sites to disappear, BUT I want to know what morons looked at this site as a place to get news.... the problem with the web is anyone can pretty much say anything but people on Wall Street need to take a look where they are getting their "facts", You have to be responsible when reading the news on the web.

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