“From the boiler room-basement brokerages of southern New Jersey to the opulent office suites of midtown Manhattan hedge funds, the U.S. financial police is supposed to track down stock market fraud wherever it takes place. For what appears to be the first time, a tip-off is leading them into the world of Twitter.
U.S. market regulators are trying to determine if a message posted on a hoax Twitter account this week was used as part of a securities fraud scheme, The Huffington Post has learned. The inquiry will be looking at tweets, sent Tuesday from an account thinly disguised as that of a well-known equity research group, that contained false information regarding Silicon Valley company Audience Inc. The tweets caused a violent sell-off in the stock of that company Tuesday afternoon, which some market participants noted was likely intensified by high-frequency trading robots.
Diane Vanasse, a spokesperson for Audience, Inc. said the “company was certainly aware of the hoax tweets” and said that “Nasdaq is investigating” the matter. Joe Christianet, a spokesperson for exchange operator Nasdaq OMX, said the electronic trading board “did refer the matter to FINRA.”
Nancy Condon, a spokesperson for private market regulator FINRA, could not confirm or deny an inquiry was taking place, but noted that market activity of this kind is usually investigated by either FINRA or the federal Securities and Exchange Commission.
A spokesperson for the SEC declined to comment, and representatives for Twitter did not respond to repeated requests for comment….”
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