SEC Looking Into Glitch That Led to UAL's Stock Drop

The Securities and Exchange Commission has opened a preliminary inquiry into the circumstances surrounding the erroneous release of a 2002 news story that resulted in a steep drop in UAL Corp.'s stock, the Wall Street Journal reports. The SEC aims to determine whether there was any improper behavior behind the story, which was picked up by Google's news service, says the WSJ.

Late Wednesday, Tribune Co. said a technology failure at Google—which drudged up a 2002 Chicago Tribune story about United Airlines' bankruptcy—caused a plunge in UAL's stock Monday. Shares fell from $12 to as low as $3 but then recovered.

In a news release, Tribune said the erroneous posting of the old story stemmed from "the inability of Google's automated search agent 'Googlebot' to differentiate between breaking news and frequently viewed stories on the Web sites of its newspapers." Tribune also said it identified the problems months ago and asked Google to stop using the function to find stories on its newspaper sites.

Tribune went on to say that the story was not republished: It received a single visit around 1 a.m. Eastern time Sunday, but because traffic was very low at that hour, the old article's link landed on the "most viewed" tab of the South Florida.) As a result, the Google search crawler picked it up.

In a statement, a Google spokesman said, "The claim that the Tribune Company asked Google to stop crawling its newspaper Web sites is untrue."