WASHINGTON: The SEC wanted to leave a lasting impression on its
target audiences last week, but some PR agencies claim all the
commission did was damage the credibility of an important PR tool: the
To show how easily online investors can be fooled, the SEC set up a fake
website, mcwhortle.com, and sent out a news release announcing the
company's intention to go public. The release, sent through accomplice
PR Newswire (PRN), went to 3,500 web portals and touted the company's
expertise and attributes. When readers clicked a "buy now" button, the
scam was revealed.
But, said Kenny Fried, partner in Brotman Winter Fried, "It's hard
enough getting people to read press releases. This will make them think
twice about whether one is true or not."
Dave Armon, president of PRN Americas, defended the campaign, saying PR
people now have proof of the power of the press release. In a little
over three days, the website garnered 125,000 hits.
For some, the stunt was eerily reminiscent of the Emulex hoax two years
ago. A California man put out a fake press release on Internet Wire and
within 16 minutes, investors traded 2.3 million Emulex shares and the
price fell from $103.94 to $43, a $2.2 billion
For the mcwhortle.com campaign, PRN agreed to work with the SEC gratis
only if the disclosure media - Bloomberg, Dow Jones, and Reuters - were
aware of the plan.
John Nester, spokesperson for the SEC's office of investor education and
assistance, said the release and website did their jobs. "This was a way
to communicate the way (online investors) like to communicate - in a
non-threatening, non-authoritarian manner," said Nester. "We want to use
the same tools as the bad guys."