Steve Jobs rumor: What can the SEC do?

The only way to stop the false rumors is to ban short selling across the board.

Cox and the SEC are crap. Here you have a so-called ‘regulator’ who neither generates new laws or enforces old laws. What the hell does he do all day? Golf!

To prosecute such cases one must prove intent,motive and gain.To accomplish all of these can be VERY difficult if other people were used in the scheme.

There is plenty of blame and culpability to go around, but as a journalist I have to point at CNN. They publish, what turns out to be a lie, under the CNN banner. They not only do not check sources and ask for corroboration, but they allow complete anonymity- CNN does not even ask for a name and address no less check the identity before they publish this stuff under the CNN name.
How can I then trust their TV coverage?
I see further down on this form a request for name and location on a letter to the editor but not on a news item. Yuck.

Sure, posting incorrect information about people and companies isn’t nice, but the fact that a story like this can cause Apple stock to plummet shows that Apple’s value is built on hype and that people are speculating. In different words, I don’t think the SEC should do anything about this. Companies and individuals that get hurt by rumors have only themselves to blame.

What should be done is to re-institute very high taxes on short term capital gains in order to discourage speculation.

If you’re dumb enough nowadays to make financial decisions, any decisions at all as a matter of fact, based upon rumors before you do your homework then you deserve to lose your shirt and more. You need to verify your sources and then check again. That’s a thought brought to you by the investment group at http://www.lanaslines.com

Person who starts the rumor should go to jail.

Ironic that J. Dimon thinks that people should go to jail for spreading rumors. His firm certainly benefited from false rumor-mongering about BSC, forcing that company from solvency to the brink of bankruptcy in 3 days. This is just the free market at work–whereas getting the Fed to insure your losses when acquiring a competitor–is not.

I think it $ucks that this was done to Apple. Its a great company with great products and is making huge profits and has a fantastic growth potential. But the stock market is an emotional and subjective thing. In the beginning it was a closed system where friends invested in each others companies based on hearsay and conjecture. It was never based on logic. So rumors and false info historically have driven the market. When companies went public, some financial rules were developed to help investors decide if a stock was worth investing in. Buy low sell high makes the money. So if most investors would invest and not panick and day trade for a few cents, maybe the market would behave better. It is what it is. I see no end to its frailness in the current recession and devalued US dollar.

This gets into a bigger issue of so called “self-reporting” and how it has grown to incredible proportions. Youtube has created this - and CNN tries to be “hiP” with Ireport - yet of course takes no responsibility for the content. Why is CNN not under investigation? Why do they continue to air this trash?

Along with the SEC, the NY Attorney General’s office ought to also look into any illegal market manipulation and connections between short sellers and bloggers who say they don’t own any Apple positions but who are friendly, and perhaps nefariously working for —and hold positions in—Apple competitors.

I’d support the death penalty for this, any form of stock manipulation or insider trading.

Those rumors are simply and just the latest and desperate attempts to ruin Apple, by Microsoft and their evil morons

I would welcome an opportunity to sit on the Jury. The SEC HAS TO bring this unethical behavior to trial. If I were the judge, 25-to-Life would be appropriate for this person.

It’s the combination of the media and the traders that makes this an unhealthy and unstable market. It’s the news article plus the stock starting to tank that scares people into selling. This is all hedge funds scaring people into selling the stock so they can buy it back because they’ve been shorting it since $180 2 months ago. Anyone who is arguing that the solution is that shareholders should verify information before they trade is missing the point. People start to sell when the shorts scare people into selling by tanking the stock, not because of the news that they can’t verify. What if it turned out to be true? Once you verified it, the stock would be at $50. There has to be a sense of trust that the media is not a part of the manipulation or else the market is a con game, not a market.

The problem is with Apple. They are secretive. This type of rumor would have no effect on the stock price if a. They would be open about Steve Jobs’ health, and b. the corporation would make overt efforts to ensure investor confidence by not hinging the entire corporation’s fortunes on the health of one man.

I’d also remind people of the irony of the government wanting to hold an individual responsible for market manipulation, while simultaneously bailing out market manipulators to the tune of 7 billion dollars. This is also a government that constantly spreads rumors and lies in order to manipulate a public into acceptance of a failed foreign policy which results in a trillion dollar Iraq war. How about some accountability their? How about some internal finger pointing from the main stream media?

Okay, so *here’s* an interesting question, then. Let’s say that *you* were out fishing with Steve Jobs for the last couple of days (or otherwise had ongoing personal contact with him during the time he supposedly had the attack). You *know* that he didn’t have one. But you see the stock tanking because the rumor is out there. So, you buy up a bunch of Apple stock because you know that, eventually, it’s going to come out that he didn’t actually have an attack and the stock is going to recover.

Would you consider that “insider trading”?

Interesting article. Good job.

The political ideologies behind the opinions about fair play in the market are curiously hard to work out.

We have some folks who think the market should be regulated so that gamblers can feel safe, and other folks who think gamblers should beware.

I think any government that tries to regulate the market is going to have the same problem that confounded King Henry the 8th of britain, arguably the world’s first wannabe market dictator. (he abolished trusts etc)

That is, how can you supervise folks who, by definition, are making a profit from secret information and the folly of their competitors? First, you have to have everything transparent and out in the open. So how the hell can anyone get an economic advantage? And what happens to trade secrets, otherwise known as copyright? Is that all replaced by a big communal pot of wisdom, and only wisdom from this pot is allowed to be used to make products?

Market regulation is communism light, and it is perhaps the crowning irony of the new century that Russia became capitalistic and aggressive as the USA became socialist and pussy.

Regarding Apple, if their management and owners were true to their philosophy then it wouldn’t matter what happened to the stock price. They would be in it for the quality of the products, and the share price would be an irrelevant number, as far as they are concerned.

I suspect things will not start getting better until we return to the values of the 19th century, when a man was considered vulgar and suspicious if all he did all day was talk about money and wear fine clothes.

I have to agree with most of the comments here. The SEC can’t enforce this rule, no way. It’s too easy to be anonymous on the Internet.
My friends on this AppleInsider thread disagree competely though.
Responsibilty lies with investors. If you don’t want to be burnt by half-baked rumors don’t day-trade, don’t sell on unverified rumors, don’t invest money you need in the short term.
-Murphy Mac

Here’s the link to the Cramer clip you mentioned- it’s still up on thestreet.com -

http://www.thestreet.com/video/cramermarketupdates/10329438.html

Pretty nuts.

As a AAPL stock owner I’m not thrilled with the stock going down because someone yells “fire”.

At the same time I have come to expect dishonesty from people as a normal part of life and have adjusted my decisions accordingly.

People say untrue things to try to damage the reputations of companies and people all the time trying to manipulate markets.

Look at politicians. Do they ever intentionally lie? Maybe they should fine and punish them too if they get caught.

It’s very simple…..

The stock market should be about investing in a company you think will prosper. If it doesn’t look good for you, you sell it.

Short selling is like being he guy at the craps table betting against the shooter. Good game for Vegas, terrible for American Investors. As long as people have all of these uncontrollable ways to manipulate confidence and to benefit from it, it will not stop.

Eliminate the game and bring order to the market. Yeah, there won’t be so many ways to make a bundle in a short time, but stability is more important than providing a few savvy folks with ways to use the rest of us to their benefit.

this rumor was further published by Henry Blodget, a person previously sanctioned by the SEC for giving knowingly misleading information about a company. Mr Blodget was very vocal (if not the instigator) about reports relating to Mr. Job’s health immediately after Mr. Job’s appearance in January.

What are the free speech implications of this? Why is it illegal for “Johntw” to spread rumors? Who is he and why should we care what s/he has to say? People spread rumors all the time. Anyone remember the old saying “Sticks and stones may break my bones but words will never hurt me”?

To hell with SEC chairman, Chris Cox and his bull! A US ATTY should indict under the RICO laws and not only confiscate all profits but the ENTIRE investment in these short sells. This will stop it cold.

If I were the SEC I would investigate the ‘legitimate’ analysts instead. Katie Huberty at Morgan Stanley would be first. She missed Q1 revenue by a billion dollars and she’s still employed and cranking out harmful projections that have contributed big time to destroy $80 billion in market cap.

Look at this if you want more background info (Thanks Andy):
http://seekingalpha.com/article/96803-worst-analyst-on-apple-lowers-price-target

C’mon. It’s the Internet, with its poor signal to noise ratio. I think that the reaction to such an unsubstantiated, unverified report is the problem with the way people currently trade stocks. Blame profiteering stock holders instead of some moron spreading rumors.

While I would never condone lying, what does this phenomenon say about the people who trade stocks based on a comment made by “Johntw”? Or, the news agencies that propagate the rumor? If people would treat stock(s) like the actual ownership of a company (which they are) rather than trading them like baseball cards this “problem” would not be news worthy and agencies like the SEC wouldn’t need to spend the time nor money on futile investigations.

yeah, kind of like Cramer talking about washington mutual

So why doesn’t steve jobs just sue for slander based on the damages caused by the drop?
If the SEC can’t do their job then Apple should do it for them.
Principles….. ya know?

I have to agree that this SEC does not have the will to enforce its own rule came to light when my complaint against unknown, possible naked short selling against FNM DURING SEC’s BAN on NAKED SHORT SELLING for select few finacial companies. My stocks were listed as “ONITSWAY” for over 7 days since the original purchase transaction. The response I got back was that it was a “technical glitch”. In my trading stocks over 15 years, I have never seen “ONITSWAY” after the three day settlement date. Most people know that market makers and Hedge Funds play the short sell game the most. Yet SEC always exclude the Market Makers from short selling, and allows the NAKED SHORT SELLING to continue even after they have declared a rule against it. I’m convinced that my purchase transaction was a naked short sale by either Market Maker or some other entity because I have never had a “technical glitch” in 15 years of trading until I purchased the FNM at the time when I did not expect NAKED SHORT SELLING due to SEC’s declaration against it.

Yes, I do agree there is no teeth in SEC to enforce its own rule.

Thanks for the story P.E.D..

It takes guts to point out the foibles of your employer.