in august of $2001$ mark jacobs was a $23$ year old student at el camino community college in California. He had no background in investments. He worked part time at internet wire, a company that distributed press releases on the internet. the same day that jacob left his job at internet wire he shorted $3,000$ shares of emulex, another internet company. By shorting the stock jacob was betting that the stock price would decline. However the price increased; within a week, jacob had $97000$ in losses. after market closing Jacob sent an email to internet wire under the guise of a public relations firm stating that emulex was under investigation by the SEC for faulty accounting practices, were restating their earnings and their CEO was resigning. Bloomberg and the dow jones news services reported those rumors to be valid. At the market open, emulex stock plummeted from $$113$ to $$43($ a $62$ present decline$),$ costing the company nearly $$2\mathrm{.}45$ billion of its market value. Later that day, Jacob closed out his short position and made more than $$54,700.$ He then purchased $3,500$ shares. The following day, after the company dispelled the rumors, he sold these shares and made a total of $$187,000.$ Authorities quickly traced the emails back to el camino college and using the trades in emulex located jacob as the source of the rumors. Convicted of securities and mail fraud, jacob was sentenced to $44$ months in prison had to forfeit his profits and was forced to pay over $$103,000$ in penalties for his illegal actions.

Does jacob$$s age and background in investments play a role in his culpability?

What responsibility do you believe that the newswire services, Bloomberg and dow Jones, had in the scheme?

What is the ethical difference between what Jacob did and posting opinions about various stocks on blogs and Internet chat rooms?

If the rumor had been ignored by the market, would this change your view of Jacob$$s actions?