'Emulex Wire' Reborn in Nasdaq Deal

At a time when Wall Street is struggling to restore investor confidence, the Nasdaq Stock Market is teaming up with a company that played an unwitting role in one of the more memorable stock market hoaxes of recent vintage.

The Nasdaq announced this week that it is entering a revenue-sharing partnership with Market Wire, a four-year-old wire service that specializes in distributing corporate press releases. The deal calls for Nasdaq to promote Market Wire's services to companies that trade on the stock market.

Never heard of Market Wire? There's good reason. Up until Friday, the Los Angeles-based company went by the name Internet Wire. Internet Wire is best known for its role in an August 2000 stock market hoax involving shares of EmulexELX.

In that incident, Internet Wire distributed a bogus Emulex press release that caused a brief but sudden 60% drop in the share price of the technology company. The bogus release, which claimed the company was restating earnings, was picked up and republished by several financial news organizations.

The hoaxer ultimately turned out to be a former Internet Wire employee who pleaded guilty to securities fraud. Internet Wire, which said it had no knowledge of the incident, had vowed to tighten its security measure in the aftermath of the hoax.

Those measures proved less than foolproof last summer, when a second hoaxer struck. This time the wire ran a bogus press release about a tiny drug company called Cel-SciCVM, in an apparent attempt to manipulate the stock. The hoaxer in that incident has never been identified.

Nasdaq officials were unavailable to comment on the deal, which is part of strategy by the stock market to broaden its corporate support offerings for publicly traded companies. The Nasdaq has also entered a similar partnership with the Webcasting company CCBN, in which Nasdaq will promote the Boston-based company's services.