Fake News Seeps Into the Business World
If you follow politics at all, you have heard the now ubiquitous phrase “fake news” many times. President Trump first made the phrase popular during his 2016 presidential campaign. We now seemingly can’t go a week without hearing it, especially since the media continues to give the president more than enough ammo to call it out.
The phenomenon of fake news has now taken on a new form — and it is seeping into many different parts of our society. Specifically, it is finding its way into the world of business. In some ways, this is even worse than fake news in politics, because in this world, there are billions of dollars involved and stockholders to keep happy. One inaccurate story can affect stock prices and create swift market swings.
If you’re looking for an example of the impact fake news can have on a company, look no further then what took shape recently with General Electric (GE) and The Wall Street Journal.
The Journal published a story based on unfounded allegations against GE. The allegations came from Harry Markopolos, who is known as one of the individuals who sounded the alarm in the Bernie Madoff Ponzi scheme case.
Markopolos alleges that GE has been misleading federal regulators on their cash position — and in turn, misleading their investors. Essentially, Markopol's claim is that GE has been cooking the books. This is a strong allegation, and if it were true, would be marked as one of the great scandals in American business history — think Bear Stearns, Madoff, or Tyco.
But, as has been reported, the accusations made by Markopolos couldn’t be further from the truth. Despite GE presenting the Journal with numbers that backed up their claims against Markopolos’ outlandish fake news, the damage had been done. GE’s stock price took a big hit — falling 11% after the story broke.
The worst part? Markopolos never checked his numbers with GE, and, furthermore, it appears he has an interest in GE’s stock price falling. A stock price falling 11% is no laughing matter — that leaves stockholders holding the bag. And for what? No reason, other than unsupported claims from someone with a competing interest. It seems like he would give GE a fair shake, right?
It’s pretty surprising that The Wall Street Journal would publish such claims without much scrutiny of Mr. Markopolos, and only feeds into the mistrust that so many Americans have for the media today.
It’s time for us to take a good look in the mirror — journalists shouldn’t be publishing wild allegations and misinforming the public when they have the power to swing stock prices wildly.
Jonathan Thomas is a former Union County, North Carolina Commissioner and currently serves as Administrator at Pruitt Health
