Sun, Oct 26, 2008 - Page 11 News List

Teenager said to have faked Internet report on Jobs suffering a heart attack

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It was an 18-year-old who posted the fake Internet report earlier this month that Apple Inc chief executive officer Steve Jobs had suffered a heart attack, two people with knowledge of the matter said.

The US Securities and Exchange Commission (SEC) is examining the teen’s motives after the article on CNN’s iReport.com sent Apple shares down as much as 5.4 percent on Oct. 3, according to the people, who declined to be identified because the probe isn’t public.

While the investigation is continuing, the agency hasn’t unearthed any trading records that show he benefited from the drop, one of them said.

The so-called citizen-journalist article stoked investor concern that Jobs’s health was in danger. The 53-year-old, who co-founded Apple in 1976, underwent surgery for a form of pancreatic cancer four years ago.

At a company event in June, he appeared thinner, sparking speculation he was ill.

The SEC is searching for traders who try to depress stocks by spreading false rumors amid a credit-crisis that has fueled the widest swings on a percentage basis in the Standard & Poor’s 500 Index since 1932. The regulator opened a probe into the Apple report within hours.

John Heine, an SEC spokesman in Washington, and Apple spokesman Steve Dowling declined to comment.

CNN, owned by Time Warner Inc, said earlier this month it was cooperating with the SEC investigation.

The Atlanta-based network describes iReport as a place for “unedited, unfiltered news” and said it “makes no guarantee about the content or coverage.” The site was started in August 2006 as part of CNN.com and became a stand-alone Web site in February.

CNN said after Apple’s denial that it disabled the user’s account and removed the “fraudulent content.”

On Thursday, spokesman Jennifer Martin said the cable news channel wasn’t aware of the age or identity of the person behind the iReport post and CNN doesn’t plan to review its procedures for placing content on iReport.

The bogus report cut Apple’s market value by at least US$4.8 billion in the first hour of NASDAQ Stock Market trading before a spokesman for the Cupertino, California-based maker of iPods and Macintosh computers said the report wasn’t true. The shares recovered a bit, closing down 3 percent.

The article, posted under the name “Johntw,” claimed Jobs was rushed to an emergency room after suffering a “major heart attack.”

“Steve Jobs was rushed to the ER just a few hours ago after suffering a major heart attack. I have an insider who tells me that paramedics were called after Steve claimed to be suffering from severe chest pains and shortness of breath,” the author wrote.

“My source has opted to remain anonymous, but he is quite reliable. I haven’t seen anything about this anywhere else yet, and as of right now, I have no further information, so I thought this would be a good place to start. If anyone else has more information, please share it,” the report said.

Henry Blodget, the former Merrill Lynch & Co Internet analyst who is now a blogger, drew attention to the iReport story by posting an item on his Silicon Alley Insider Web site.

Last week, Jobs made his first public appearance since the bogus report. He disclosed his blood pressure and declined to take questions on his health.

Speculation about Jobs’ physical condition has weighed on Apple stock this year, contributing to a 51 percent decline since December.

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