Feeds

United 'bankruptcy' points to new stock scam techniques

Why use spam to pump and dump when a botnet will do?

High performance access to file storage

Market watchers are trying to unravel how a six-year old story suddenly rose to prominence, hammering the share price of United Airlines earlier this week.

A 2002 story of a bankruptcy filling by UAL was pushed into the most viewed business story category on the South Florida Sun Sentinel's Web site on Sunday morning. The newspaper's owner, Tribune, said the story (which omitted an obvious date stamp) was not republished. In fact it originally came from the Chicago Tribune, a sister publication to the Sun Sentinel

Google automated software noticed the link and the story appeared in Google News. A Florida investment firm picked up on this and wrote a one line summary for Bloomberg that stated a paper had reported that United Airlines has filed for bankruptcy protection, sparking a run on United's shares.

It's unclear how much traffic the antiquated story received on the Sun Sentinel website before its sudden resurrection, zombie-like, to menace UAL shares. Tribune spokesman Gary Weitman declined to quote traffic figures but told AP that "as you'd expect, the business page of the Sun Sentinel Web site doesn't get a lot of traffic in the middle of the night."

Weitman added that hits on the story had spiked on Sunday and Monday morning. Coincidentally United filed for bankruptcy protection on a Monday in December 2002.

That factor goes some way to explaining why neither Income Securities Advisors, which posted the summary, nor Bloomberg, picked up on the mistake. The share prices now and six years ago were very different but in the rush to push out breaking information it's understandable how this factor, obvious in hindsight, was overlooked at the time.

The erroneous reports were corrected minutes after they appeared but not before United Airlines' stock price sank more than 75 per cent, slipping down to the $3 level before trading was suspended.

All this might have made someone who knew that the share prices were about to nose-dive a lot of money by selling short. The chain of events here is quite complex, and hinges on both the intricacies of how Google's automated software works and human error ,alongside other factors that might be hard to reproduce.

Nonetheless security watchers have flagged the scenario up as a possible path in the evolution of pump and dump stock scams. Instead of using spam email to dupe potential marks into sinking money into worthless shares on the basis of fictitious good news, the approach would rely on resurrecting older items of bad news about companies, stripped of their context.

Potential fraudsters might target an obscure story with hits via a globally distributed botnet of compromised machines and let the story drift up page rankings, hopefully leading it to be picked up more widely and having an effect on the markets.

Danny McPherson, a security researcher at security tools firm Arbor Networks, said that manipulating content presented by media outlets to cause knock-on financial effects would be far from difficult.

"Given the near immediate reaction to 'leaks' in today’s Internet age, much less misinformation, and certainly [not] 'old information', one might surmise that an attacker could easily compromise a few targeted assets - not at a financial, or government, or exchange, but at a media outlet, and cause significant cascading financial impact. You could certainly buy stock and sell it short with such a ploy, or simply buy low and sell high... and with trading volumes we’ve seen here, a couple million dollars might easily fly under the radar," he writes.

"For anyone even remotely security minded, reading stories like this brings so many attack vectors to mind," he adds. ®

High performance access to file storage

More from The Register

next story
Parent gabfest Mumsnet hit by SSL bug: My heart bleeds, grins hacker
Natter-board tells middle-class Britain to purée its passwords
Obama allows NSA to exploit 0-days: report
If the spooks say they need it, they get it
Web data BLEEDOUT: Users to feel the pain as Heartbleed bug revealed
Vendors and ISPs have work to do updating firmware - if it's possible to fix this
One year on: diplomatic fail as Chinese APT gangs get back to work
Mandiant says past 12 months shows Beijing won't call off its hackers
Call of Duty 'fragged using OpenSSL's Heartbleed exploit'
So it begins ... or maybe not, says one analyst
German space centre endures cyber attack
Chinese code retrieved but NSA hack not ruled out
NSA denies it knew about and USED Heartbleed encryption flaw for TWO YEARS
Agency forgets it exists to protect communications, not just spy on them
Heartbleed exploit, inoculation, both released
File under 'this is going to hurt you more than it hurts me'
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.