BlackBerry Stock Bounce Prompts Investigation

Last month, we all had a small chuckle when rumors started to fly that Samsung was in talks to buy BlackBerry – rumors that were debunked within the same day. Interestingly, the rumors sparked a huge bounce in BlackBerry’s stock value – after which it fell pretty hard to more realistic levels. As it turns out, regulators in the United States and in BlackBerry’s native Canada are taking a close look at what happened to see if the stock bounce was specifically engineered by intentionally spreading false information.

According to a report from the Wall Street Journal¸ the Securities and Exchange Commission (SEC) and the Ontario Securities Commission are looking into trading activity right around the time the original Reuters report broke the buyout rumor story.

“Investigators are looking at whether someone deliberately fed information to reporters at the news service for the purpose of profiting on the resulting stock increase,” the report explains, citing a person “familiar with the matter.”

After the story first hit, both Samsung and BlackBerry officially denied that there were talks of a buyout – however, the new report says that Reuters has corrected its original report to say that “representatives of BlackBerry and Samsung” held the talks. As to whether or not executives from two different companies having a conversation is enough evidence to prompt a story like this is something of a question, but here we are regardless.

It seems unlikely that the investigators will turn up anything on which they can take action, if for no other reason than it’s hard to prove a case like this. If I tell a reporter that Company A is looking to buy Company B, I can only guess what might happen to the stock. Sure, there are predictable trends, but other than that, it’s all guesswork. That said, it should be interesting to see whether or not the investigation reveals that the same person who spoke with Reuters also profited on the bounce.

[Source: Wall Street Journal]