Kamilla Bjorlin and the art of faking

The lady is a Hollywood actor. According to The Washington Post , she has performed alongside the likes of Al Pacino and Anthony Hopkins. She once played the role of an ‘evil serpent’ in the soap opera Days of Our Lives .

Well, she’s embroiled in a fake news controversy in the US as we speak, and the case could leave some imprints on how business news is created and spread in the country. This week, reports quoted court documents that revealed Bjorlin as the “mastermind” behind a fake news mission. She, allegedly, was paying content creators clandestinely to dish out hundreds of articles and social media posts that said great things about some companies in an attempt to boost their stock prices.

So says the Securities and Exchange Commission (SEC) of the US, the country’s stock market regulator, like our own SEBI. The SEC has already taken enforcement actions against dozens of individuals and companies that churned out articles promoting business entities and their products without disclosing that they were paid by the very companies they were merrily singing paeans about.

What the SEC has revealed might surprise you. Take Bjorlin’s case. Her firm placed dozens of fake, promotional material across media, eventually boosting the stock price of Galena Biopharma, a small-scale drug maker, by, hold your breath, 925 per cent. Most of these articles appeared on popular online media portals known for their credibility. Just two years ago, the SEC had booked a Scottish trader for tweeting fake news that caused stocks of two companies to plunge. Obviously, the trader tried to profit from the event. The fake tweets cost shareholders over $1.6 million (₹10 crore-plus).

What matters is the impact these news have on markets at a time when most trades are conducted between machines. Which means these are based on algorithms, which may not be able to read between the lines like a human does, and raise alarms. In the world of algorithmic trades, transactions happen in split-seconds; it is impossible to track and bin fake news and prevent them from swaying stock prices.

You betcha! Social media throw up several such challenges. Now, several companies offer services such as social media screening and management for businesses. They build extensive networks and pump doctored information to these networks, ensuring that such information spreads fast and wide, culminating in a value-boost for their paymasters. Sure, several genuine players operate in this space, but distinguishing chalk from cheese is a tall order.

In fact, this menace becomes more dangerous when you consider that most countries, including emerging nations such as India, do not have a proper social media policy in place. So screening and tracking fake news, in business in particular, is a herculean task. India, where the stock market is on a song these days and where retail investor participation is booming, has a long way to go when it comes to tracking fake business news.

Sometime ago, SEBI had proposed a ban on unauthorised trading tips through SMSes and social media, but nothing came of it. Just this week, SEBI asked for help from telecom regulator TRAI to tackle fake investment tips sent by people claiming to represent brokerage houses such as Motilal Oswal and HDFC Securities. The broking firms had disowned these tips. One hopes there’ll be more such measures soon.

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