False tweet that Obama was injured raises social media doubts
Humans didn't believe it but computers reacted to a false Twitter news break that President Obama was injured in a White House explosion
When a false report of explosions at the White House instantly wiped more than US$136 billion off the value of US stocks, Jonathan Corpina did not need a powerful computer.
He used the tool favoured by traders for more than a century: a phone. Corpina, senior managing partner with Meridian Equity Partners, who works on the floor of the New York Stock Exchange, called a client two blocks from the US president's house.
"He did not know what I was talking about," Corpina said. "He said 'I'm staring at the White House and there's nothing going on here right now'."
Less than a month after social media received US regulators' blessing to be a source for market-moving news, the hacking of the Associated Press' Twitter account is raising concerns over the trustworthiness of information spread via the site.
Stocks tumbled about 1 per cent on Tuesday after the AP, one of the world's largest news agencies, sent out the fake Twitter post about explosions at the White House, which had supposedly injured President Barack Obama. DJIA stocks, which had dipped 150 points on the report, eventually recovered after AP blamed a hacking attack. It removed the account.
A group called the Syrian Electronic Army claimed responsibility for the attack. The group's Twitter account is linked to the website Syrianelectronicarmy. com, an Arabic language site that broadcasts what the group says are its latest computer attacks.
Corpina and other traders said the dip in stocks may have started when program-trading systems ingested the fake news and cancelled buy orders while automated sell orders looked to dump shares.
"No human believed the story," Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in an interview. His firm oversees US$8 billion in assets. "Only the computers react to something that serious disseminated in such a way. I bought some stock well and did not sell into it. Humans win."
The attack comes as Twitter's chief executive Dick Costolo tries to establish the service as a viable business and prepares a possible initial public offering.
The US Securities and Exchange Commission this month said companies can use social-media sites such as Twitter and Facebook to share company announcements that can move markets. But the AP incident poses a risk to Twitter's brand as a vehicle for breaking news, and steps up pressure on the San Francisco-based company to bolster security for users, according to Wade Williamson, a senior security analyst at Palo Alto Networks Inc, a provider of network-protection tools.
"The account that got compromised is the big difference here, as opposed to the traditional impersonating-a-celebrity to say something shocking," Williamson said. "When you impersonate someone people actually trust and have some sort of implicit belief in, it does very, very different things."
The attack doesn't appear to be particularly technically sophisticated and is likely an example of an account hijacking involving the theft of the AP account user's password, Williamson said.
"This is absolutely a danger of social media," said Susan Etlinger, an industry analyst at California-based Altimeter Group. "It doesn't mean we need to throw out social media entirely; it just means we need much better methods for fact-checking and authentication."
The false information from the AP account came after repeated attempts by hackers to gain access to AP reporters' passwords, the news agency said.
The news agency is the latest victim of hacking against news outlets, including the Twitter accounts of CBS News' 60 Minutes. The television news programme said this week that its Twitter account was "compromised".
Additional reporting by The New York Times