According to the U.S. Securities and Exchange Commission, Twitter is being used by some unscrupulous individuals as a means to manipulate the stock market. Although it is not necessary for these people to take control of a major company’s Twitter account to pull off this fraudulent activity, it certainly makes the process of convincing other users much more simplistic. Because of this, major companies have become vulnerable to hacking attempts, and losing control of an official Twitter account for even a few minutes can cause a lot of damage to the stock market.
How does Hacking an Account Impact Stock Prices?
Imagine for a moment that a major company released an announcement that they were going to merge with their biggest competitor. For example, if the Sony Playstation brand’s Twitter account announced a deal to merge with Xbox, the ripple effect would involve a lot of online buzz and speculation, a quick increase of product and sales and a new evaluation of each company’s stock. Because of the viral nature of the Internet, the tweet would be passed on to millions of viewers around the world, and even if it was later deleted, there would still be plenty of copies available from people who took a screenshot. Although it might be difficult to believe, the truth would become much harder to spread, and the market would feel the impact of the lie for several days.
As you can see from the example listed above, any lie on social media that is widely circulated can change the way a company is perceived. When this happens, people will feel the desire to either quickly sell or buy the company’s stock. Therefore, as stock fraud attorneys suggest, hackers who are in a position to make a lot of money from either of these processes will take possession of a company’s account with the sole intention of manipulating stock prices in their favor.
Although it is not imperative to hack an account, this makes it much easier to get people to quickly believe the information that is being sent out. People that hack major accounts also receive a rush from this action, not considering the ‘ripple effect’ damage that can be caused. Either way, if someone repeats a lie enough times, other people will begin to listen.
If you become the victim of stock fraud, it is important to contact an attorney right way. To avoid falling prey to these schemes, though, you should always wait to verify any information that will cause you to make a major change to your stock portfolio.
Having been the victim of a Twitter hacking, Nadine Swayne understands the damage this action can cause and offers this information. At the law offices of Page Perry, LLC, they have experienced stock fraud attorneys that can provide quality legal representation if you’ve been a victim of securities fraud. Collectively, their legal team has handled thousands of securities arbitration cases and offers attentive hands-on service for their clients.
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