Less than a month after social media received regulators' blessing to be a source for market-moving news, the hacking of the Associated Press's Twitter Inc. account is raising concerns over the trustworthiness of information spread via the microblogging site.
Stocks tumbled about 1 percent yesterday after the Associated Press, one of the world's largest news agencies, said a hacking attack caused it to send out an erroneous Twitter post about explosions at the White House. The Standard & Poor's 500 Index recovered after losing $136 billion in market value and AP later removed the account.
The attack comes as Twitter Chief Executive Officer Dick Costolo is working to establish the service as a viable business and preparing a possible initial public offering. The U.S. Securities and Exchange Commission earlier this month said companies can use social-media sites such as Twitter and Facebook Inc. to share company announcements that can move markets. The AP incident poses a risk to Twitter's brand as a vehicle for breaking news, and steps up pressure on the San Francisco-based company to bolster security for users, according to Wade Williamson, a senior security analyst at Palo Alto Networks Inc., a provider of network-protection tools.
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