Don’t Believe Everything You Read Online

Several financial websites reported on an SEC press release that claimed Carson Block and Muddy Waters (a research group responsible for uncovering a few Chinese companies with suspect financials) were being investigated.

Here’s an excerpt of the false press release as displayed on the financial site benzinga.com.

The Securities and Exchange Commission has charged Carson Block and Muddy Waters LLC in a stock manipulation ring that allegedly published false information, causing a drop in the market prices of at least three stocks and generated more than $240.2 million in illicit profits when they sold shares short then repurchased the shares after a significant decline on the market.

Notice the article is yet to be retracted by benzinga.com (as of 8pm ET 6/21/2011) and it was posted by Allie Wickman who (according to the website) is a Benzinga Staff Writer.

Shortly after the fake press release was circulated the SEC made this statement:

A spokeswoman for the SEC said the release was a fake, but would not comment on whether the agency is investigating further or has informed other authorities.