Man Fined for Posting Fake News Story

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(AP) A California man will pay $25,000 to settle allegations he posted online a bogus news article that caused a sell-off in the stock of Chinese Internet company Sina Corp.

The posting on Yahoo last October appeared to be a Reuters news story that Goldman Sachs viewed Sina shares as overvalued.

Goldman doesn’t cover the company, which is based in Shanghai. Sina’s stock, which trades on the Nasdaq Stock Market, fell more than 3% on the posting.

The Securities and Exchange Commission said Nikolai Safavi sold short 1,000 Sina shares at $42 a share on Oct. 24, essentially placing a bet that the price of the stock would fall.

On Oct. 28, Safavi published the fake story, which listed two actual Reuters reporters as authors, on a Yahoo Finance message board, the SEC said.

Safavi made a profit of $350 before transaction costs and interest, according to the SEC.

John Reed Stark, the SEC’s top Internet enforcement attorney, said the agency takes Safavi’s violations very seriously even though he didn’t post a huge profit.

“We will continue to be very aggressive in our enforcement of this type of fraud,” Stark added.

Safavi agreed to pay the fine without admitting or denying any wrongdoing.

His attorney wasn’t immediately available for comment.

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