* Fake press release claimed Samsung was buying Fingerprint
* Press release sent Fingerprint shares up more than 50 pct
* Swedish Economic Crime Authority launches probe
By Johannes Hellstrom and Daniel Dickson
STOCKHOLM, Oct 11 A fake press release claiming
electronics firm Samsung was buying Sweden's
Fingerprint Cards sent shares in the biometrics
company soaring on Friday, prompting an investigation into
suspected market manipulation.
The Swedish Economic Crime Authority said it would launch a
preliminary fraud probe after company news distributor Cision
published a statement saying Samsung Electronics Co
Ltd was buying Fingerprint Cards for $650 million in cash.
Both Fingerprint Cards, which develops and makes fingerprint
scanners used to access computers and mobile phones, and South
Korea's Samsung said the press release was a fake and denied
they had been in talks.
Shares in Fingerprint Cards rose more than 50 percent on the
false statement, before the Stockholm bourse suspended trading.
Cision said its preliminary investigation showed it had been
the subject of a "sophisticated fraud".
Fingerprint Cards' Chief Executive Johan Carlstrom critised
controls at Cision saying it should have checked that
information it was sending out was correct.
"With a bigger press release, they should call to make
sure," he said. "There are only two people authorised to send
press releases and that is the CEO and financial officer. In
those cases they are sent from our e-mail addresses, and this
one was not."
Cision said it had followed its guidelines but was making
immediate changes to some of its procedures.
Chief Executive Magnus Thell said staff had called a contact
number to verify the authenticity of the release and had reached
a person who had identified himself as Fingerprint's CEO.
"When it comes to fraud, you cannot protect yourself 100
percent," Thell said.
The contact information in the fake press release included
the e-mail address "email@example.com". That domain
name, fingerprint-cards.se, was created on Thursday, a search of
records on the website of .SE, Sweden's Internet Infrastructure
The .SE organisation is responsible for Sweden's top-level
domain ".se", including the registration of domain names. A
phone number in the release was not available when called by
Fingerprint recognition is a hot area after Apple
introduced the technology in its latest iPhone saying it would
protect devices from criminals and snoopers seeking access.
Shares in Fingerprint Cards have risen almost sixfold since
the start of the year.
The Nasdaq OMX Stockholm exchange cancelled trades
worth 160 million Swedish crowns ($24.6 million) in Fingerprint
Cards from 10.17 am (0817 GMT) on Friday, just before the false
statement was released, until it halted trading 17 minutes
The exchange also cancelled 140 million crowns of trades in
Fingerprint's rival Precise Biometrics which rose as
much as 44 percent when the press release was published.
"Of course we are going to investigate what has happened and
we are going to do that with the company in question, the FSA
(market regulator) and Cision," Carl Norell, a spokesman for the
Trading in both stocks resumed later on Friday. Fingerprint
ended the day unchanged at 52.75 crowns, while Precise
Biometrics was also unchanged at 2.09 crowns. Cision shares
closed 5.3 percent lower.
Reuters withdrew a story it had published based on the hoax
While market manipulation is rare in Sweden, it is not
unheard of internationally.
Late last year, a fake press release said internet giant
Google was buying wireless hotspot provider ICOA Inc
for $400 million.
Shares of ICOA, which is traded over-the-counter, jumped
from .0001 cents to .0005 cents before the company's CEO denied
It remained unclear who was behind publication of the
Fingerprint Cards press release.
Gunther Marder, an economist at internet bank Nordnet said
the perpetrators probably had positions in biometric firms
listed on other markets in Europe not in Fingerprint or Precise.
"You would look around the world outside the territory that
the Stockholm exchange supervises," he said, adding that
sophisticated criminals would know trading in stocks listed in
Stockholm would be cancelled.