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Fake press release stirs up Swedish exchange

Oct. 11, 2013 at 11:50 AM   |   Comments

STOCKHOLM, Sweden, Oct. 11 (UPI) -- Samsung Electronics, a cutting edge Swedish technology firm and a public relations firm all said a fake press released took them by surprise Friday.

The Financial Times reported that the phony press release, which said Samsung Electronics would buy Swedish firm Fingerprint Cards for $650 million, was under investigation as an act of market manipulation.

The press release sparked a flurry of buying of the Nasdaq OMX-listed stock, which sent Fingerprint share prices up 50 percent, enough to push the value of the company up to $619 million, the newspaper reported.

The press release was posted, fraudulently, on the Fingerprint Web site and was distributed by public relations firm Cision, all of whom said the write up was a hoax.

"We were set up for this fraud and fell into the trap," said Magnus Thell, managing director of Cision.

"There appears to have been a fraudulent press release," Samsung said.

Fingerprint said it would ask Swedish finance regulator Finansinspektionen to investigate the incident, but officials there would not comment on the matter, the Financial Times said.

Johan Carlstrom, the chief executive officer at Fingerprint, blamed Cision for not thoroughly verifying the release was legitimate.

"They should have called us back. This was big news," Carlstrom said.

The release was posted on Fingerprint's Web site, as it arrived through an automatic feed from Cision, the Times said.

"The people who did the fraud are not the sharpest knives in the box -- all the trades after the press release went out have been canceled, so no one made any money," he added.

Nasdaq OMX in Sweden said all Fingerprint trades from 10:17 a.m. to 10:34 a.m. had been canceled.

"We suspected something was wrong when we started seeing big movements, and we suspected that not all participants in the market had the same information. We reacted to that," Nasdaq OMX said.

But one market analyst said the fraud played into market expectations.

Mark Newman, an analyst at Sanford C Bernstein, said it is predictable that Samsung would want to purchase a company like Fingerprint Cards that specializes in fingerprint technology for mobile devices.

"It's an area where Apple has taken the lead, and most of the industry will follow," Newman said.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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