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SEC renews its offensive against ‘fake news’

Joe Mont | April 18, 2017

Lest you think “fake news” is solely a political dilemma or modern experiment in the dark arts of election manipulation, recent enforcement actions by the Securities and Exchange Commission have shed light on the threat to public companies.

In fact, the SEC has decades of experience hunting down the sources of rumor, innuendo, and falsity. Lessons learned from those past crackdowns can help firms implement controls even as technology and the world of online media keeps evolving.

“There are rules on the books about this, and the issues go back in time quite a ways,” says Kathleen Marcus, co-chair of the Stradling law firm's Enforcement Defense & Investigations practice group and a former enforcement officer with the SEC. “It has taken various forms and continues to evolve as technology evolves. There are tweaks that have impacted the stock market now that we wouldn’t have seen 10 years ago, but the idea of a ‘pump and dump’ has been around for many decades.”

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