SEC to Investigate iReport False Story on Steve Jobs

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When a news item appeared on CNN's citizen journalism website, iReport.com, that Steve Jobs had a heart attack last Friday, October 3, it caused investors to panic and Apple stock value to slide by 9 percent before the company officially announced that the news was false.

But the damage had already been done. Apple's stock recovered and Steve Jobs was reported to be doing fine - but citizen journalism, which has been plagued by amateurism and sometimes inaccurate reporting, took a beating.

iReport.com, on which CNN allows users to submit their own content, does carry a disclaimer stating that "CNN makes no guarantees about the content or the coverage on iReport.com." However, the fact that the website is associated with the media giant was enough for investors to take note of the news when it came out.

CNN confirmed on Friday that it had suspended the user's account and removed the article almost immediately upon learning about it. It issued a statement saying, "After the content in question was uploaded to iReport.com, the community brought it to our attention."

On Monday, the U.S. Securities and Exchange Commission (SEC) launched an investigation into the report trying to ascertain whether the news article was an intentional attempt to drive down Apple's stock price. CNN said that it was cooperating fully with the SEC in its investigation.

At the time this article went to press, Apple's stock was trading just below $90, its lowest point this year. It had been trading at $106 on Friday morning before the iReport news came out.

The SEC did not comment on the investigation or offer any more details.

Steve Jobs' health has been a concern for investors who watch Apple's stock since he was treated for pancreatic cancer in July 2004. Even though there has been no reported evidence of cancer since then, his thin and gaunt looks in 2006 as well as earlier this year have lead to several media reports questioning his general state of health.

Apple has responded to questions about his health by saying that Job's health is a "private matter."

In September 2008, Jobs quoted Mark Twain in a keynote address at Apple's "Let's Rock" iPod promotional event by walking out to the podium and saying: "The reports of my death are greatly exaggerated."