Hackers put up a fake news release on a medical products company's Web site this week, trumpeting a merger with a California biopharmaceutical company, causing both companies' stocks to rise and prompting the Michigan-based medical products firm to start hunting down the culprits.
The fake news was posted on Aastrom Bioscience, Inc.'s Web site Thursday, saying it was merging with the Geron Corporation of Menlo Park, CA. APBNews says Aastrom discovered the prank and notified Geron and NASDAQ, where both companies' stock is traded.
Aastrom stock jumped a point while Geron jumped over ten before the hoax was exposed. Aastrom ended up closing up ten percent, and Geron ended up closing up eight percent.
Both firms denied any merger talks swiftly, APBNews says. Aastrom CEO R. Douglas Armstrong says in a statement the company was "appalled by this ruthless attempt to manipulate markets and potentially harm" both Aastrom and Geron shareholders.
He also says Aastrom is re-examining its Web security and pledges to work with law enforcement to track down those responsible for the hoax.
This hoax occurred a week after hackers jammed Yahoo, Amazon, eBay, CNN, and other Internet heavyweights. It was similar to a hoax last April, when a former PairGain Technologies employee tricked investors with a fake Web story that PairGain was about to be taken over by another firm, APBNews says. That hoax caused PairGain stock to jump over 30 percent.
Gary Dale Hoke pleaded guilty of two counts of securities fraud, getting five months home detention and five years probation in the case. He was said to have owned a thousand shares of PairGrain stock with options on five thousand more, but APBNews says he didn't sell any of his stock during the scam.
