SEC Investigates Incorrect Rumors Of New United Airlines Bankruptcy Filing
In the past few days, incorrect rumors of a new bankruptcy filing by United Airlines have circulated over the internet. It turns out that it was a story from 2002 that was recirculated. According to this story in the Wall Street Journal, the Securities and Exchange Commission has now opened an investigation to see if the release of the old story was an attempt to manipulate the market. Shares of United (UAL Google Finance) dropped dramatically and trading was halted after the story came out.
NEW YORK (Thomson Financial) - Trading in shares of UAL Corp. was halted Monday morning on reports that the company was filing for bankruptcy. While calls to the company weren't returned, CNBC cited the company as saying the reports were untrue.
The shares were halted at 1 cent, down 99.92% off their Friday closing price of $13.20. Volume was 29.1 million shares
This was an interesting event as the Google News front page picked up a very old story and thus caused this panic in UAL shares. I'm sure behind the scenes there is quite a bit of discussion between UAL and Google lawyers to discuss how and why this occurred.