A press release issued on Monday morning claiming that Walmart would start accepting payments in Litecoin, a digital currency, raised its price by 30% before the retail giant declared the ad false.
The statement, which appeared to come from Walmart itself, was posted on Globe Newswire, a communications service whose parent company, Intrado, is owned by private equity firm Apollo Global Management. The post came just as trading began in the US stock market and was quickly picked up by several major news outlets, including Reuters and Bloomberg. The price of Litecoin and other cryptocurrencies, such as Bitcoin, has jumped on exchanges like Coinbase.
Walmart quickly issued a statement saying the Litecoin announcement was not true and that it had not given permission for its publication.
“We are digging deeper to understand what happened,” said Randy Hargrove, a spokesperson for Walmart.
It was not clear who was behind the bogus release, which had enough of the features of a corporate release to appear genuine, but listed a contact email address on the unauthorized walmart-corp.com website. , and how he got past the Globe Newswire systems. . But it wasn’t the first such hoax. In 2010, another news outlet issued a false statement claiming that grain company General Mills was under federal investigation.
In 2009, federal securities regulators accused a broker of issuing false press releases to manipulate the shares of several public companies. In this case, the Securities and Exchange Commission acted quickly and filed enforcement action just three weeks after the scheme began.
Securities attorneys said regulators would likely open an investigation because the hoax involved a publicly traded company, and it didn’t matter if the biggest price hike was in a largely unregulated digital currency.
“This is a misrepresentation involving a public issuer,” said Andrew Calamari, attorney at Finn Dixon & Herling and former director of securities for the SEC and the New York office.
Federal prosecutors also have broad jurisdiction to investigate commercial hoaxes of this type under the Wire Fraud Act.
Representatives from the SEC and Globe Newswire were not immediately available for comment.
Walmart only learned of the statement after it began receiving calls from reporters seeking to confirm the accounts of some news outlets that had published information based on the statement, Hargrove said. He noted that Walmart generally uses Businesswire, a rival communications service, for its announcements and that the press contact named in the release does not work in Walmart’s media division.
The news was also briefly posted by the @Litecoin Twitter account. The Litecoin Foundation, which supports the coin’s development, subsequently announced that it had not entered into a partnership with Walmart.