SEC opens probe into UAL share price drop: report

A United Airlines airplane pulls into the United Terminal at O'Hare International airport in Chicago June 4, 2008. REUTERS/Jeff Haynes

WASHINGTON (Reuters) - Securities regulators have opened a preliminary investigation into UAL Corp's UAUA.O stock drop after an outdated story about its bankruptcy was treated as current, breaking news, people familiar with the matter told the Wall Street Journal.

The U.S. Securities and Exchange Commission is looking into whether there was any improper behavior behind the release on Monday of a 2002 Tribune Co TXA.N news story about the bankruptcy filing, people told the journal.

The company’s stock price dropped 76 percent to $3 after the article was posted on the Bloomberg financial news service. It later recovered.

The inquiry is in its early stages and may not evolve into a full investigation, a person familiar with the matter said.

A spokeswoman from UAL said: “Our investigation as to how and why this happened is ongoing. It would be inappropriate for us to comment on any aspect of the investigation while it is under way.”

The SEC declined to comment. A Tribune spokesman also declined comment.

On Wednesday, Tribune blamed technology owned by search engine company Google Inc GOOG.O for treating the outdated story as new.

Tribune said in a news release that it had identified problems with Google’s “Googlebot” technology months ago and asked the company to stop using it to “crawl” for stories on its website.

The story appeared over the weekend on an inner page of the website of Tribune’s South Florida Sun-Sentinel newspaper in Fort Lauderdale. Google News then featured it in its search results, where it was discovered by Miami Lakes, Florida-based investment firm Income Securities Advisers.

Reporting by Washington and New York newsrooms; Editing by Andre Grenon