Fake press release pumps up the volume

There were red-faces in the Dutch financial news sector yesterday after a fake press release touting a major telecoms takeover prompted journalists to post stories and investors to bid up shares in the companies concerned.

In the fake release, telecoms giant Versatel and Talpa Capital, the company behind Dutch media tycoon and Big Brother creator John de Mol, 'announced' they were in in takeover talks with Deutsche Telekom:

That's not as unrealistic as it seems: just last month there were tie-up talks between Versatel, Talpa and Belgacom. All these companies are interested in the marriage of television, internet and telecommunications.

When the 'news' hit the wires on Thursday, shares of Versatel went up five per cent on the Dutch stock market. Even ANP, the most important news supplier in the Netherlands, reported the possible take over, as well as Dow Jones. Dutch banker Theodoor Gilissen issued a sell advisory, based on the release.

By midday, Talpa and Versatel dropped a bombshell by saying that the press release was a fake, possibly sent by fraudsters who want to make a quick buck. Stock scams usually arrive in mailboxes as newsletters that purport to offer unbiased recommendations ("HOT Pick Ready To Explode All Week!"). The idea is that unwitting investors purchase the stock in droves, creating high demand and pumping up the price.

However, some reports suggest that the press release might also have been a malicious joke.

Versatel, which lodged a complaint with the Dutch Public Prosecutor Service, is currently trying to find out who is responsible for the ploy by analysing the headers and the IP address of the mail message.

The scheme raises serious questions about the reliability of press releases, and the vigilance of press agencies, in particular since the press release was sent through an anonymous remailer called Shitzooi ("Shit mess"). That name even appeared in the header of the mail. ANP admitted that they have failed to do what they normally do: always doublecheck with the source.

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