In the late 1990's, rumors on stock boards from Yahoo!, Silicon Investor, The Motley Fool and Raging Bull would often have impact on the financial markets, whether through bumping up penny stocks in a quick pump and dump scheme, or suggesting rumors of mergers, take overs, new product shipments or product delays. While some of these people were caught, others made a lot of money in gaming the system.
Now, with community-generated media growing by leaps and bounds through personal blogs, and aggregation sites like Slashdot and Digg wielding a great deal of power in the blogosphere, some are trying to game the system through promotion of their own company's products, or through purchasing stock cheap, hyping a rumor, and selling when the stock goes up - migrating away from discussion boards, and to more legitimate, yet still unsourced sites.
One of these recent activities is described by Silicon Valley Sleuth, who charts a series of posts by a no-name blogger to Digg.com about the possibility of Google (GOOG) acquiring Sun Microsystems (SUNW). The blogger made multiple attempts to have his rumor picked up by Digg, and Sun stock, coincidentally or not, is up fractionally since he started. Should this be illegal, or has this person simply found a loophole, and enough suckers to help him make a profit?
Given the wide opportunities offered through freedom of speech, this individual and others like him, certainly have that right - but the responsibility is on site owners for Slashdot and Digg to reign in their algorithms or editors, to offer their readers the highest accuracy. Only though accuracy and consistency will readers continue to trust the sites, for Web users are fickle and can move along.
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