California: A bogus news release prompted several websites to run incorrect articles about Google making a $400 million acquisition of a wireless firm on Monday, the target company ICOA said. "This was a hoax. We are investigating the source," said an emailed statement from George Strouthopoulos, chairman and chief executive of ICOA, the wireless firm Google purportedly was acquiring.
The reports began after the fake release was posted on the PRWeb site which is owned by the cloud software firm Vocus. "This is NOT TRUE!!" Strouthopoulos said in an email. "Never had any discussions with any potential acquirers!! This is absolutely false!" The executive added that "someone, I guess a stock promoter with a dubious interest, is disseminating wrong, false and misleading info in the PR circles."
He said the fake release appeared to come from Aruba, and added that ICOA "will report this to the proper authorities." For several hours, reports were circulating that Google had made the purchase as part of an effort to moving into wireless communications. Google refused to confirm the news about an acquisition.
The ICOA saw a spike in price and volume in morning trade in over-the-counter 'pink sheets' trades in stocks which are not listed on major exchanges. The incident suggested a so-called 'pump and dump' scheme in which false information is leaked, allowing a speculator to profit from rapid buying and selling. These schemes are illegal under US securities laws.
The Securities and Exchange Commission (SEC) declined to comment on the matter.