STOCKHOLM (Reuters) – A fake press release claiming Korean electronics firm Samsung was buying Sweden’s Fingerprint Cards sent shares in the biometrics firm up by 50 percent, prompting investigations by Swedish authorities.
The statement, published by press-release distributor Cision on Friday, said Samsung Electronics Co Ltd was buying the Swedish developer and maker of fingerprint scanners used in computers and mobile phones for $650 million in cash.
Both companies said the release was a fake and denied they had been in talks.
Cision said its preliminary investigation showed it had been the subject of a “sophisticated fraud.”
The Swedish Economic Crime Authority has launched a probe.
Fingerprint recognition is a hot area after Apple introduced the technology in its latest iPhone saying it would protect devices from criminals and snoopers seeking access.
Shares in Fingerprint Cards have risen almost sixfold since the start of the year.
The Nasdaq OMX Stockholm exchange cancelled trades worth 160 million Swedish crowns ($24.6 million) in Fingerprint Cards from 10.17 am (0817 GMT), just before the false statement was released, until it halted trading 17 minutes later.
The exchange also cancelled 140 million crowns of trades in Fingerprint’s rival Precise Biometrics which rose as much as 44 percent when the press release was published.
“Of course we are going to investigate what has happened and we are going to do that with the company in question, the FSA (market regulator) and Cision,” Carl Norell, a spokesman for the exchange said.
Reuters withdrew a story it had published based on the hoax press release.
While market manipulation is rare in Sweden, it is not unheard of internationally.
Late last year, a fake press release said internet giant Google was buying wireless hotspot provider ICOA Inc for $400 million.
Shares of ICOA, which is traded over-the-counter, jumped from .0001 cents to .0005 cents before the company’s CEO denied the news.
It remained unclear who was behind publication of the Fingerprint Cards press release.
If the statement was an attempt at market fraud, the perpetrators probably had positions in biometric firms listed on other markets in Europe not in Fingerprint or Precise, Gunther Marder, an economist at internet bank Nordnet said.
“You would look around the world outside the territory that the Stockholm exchange supervises,” he said, adding that sophisticated criminals would know trading in those stocks would be cancelled.
(Reporting by Johan Ahlander and Daniel Dickson, Johan Sennero, Sven Nordenstam and Johannes Hellstrom; Writing by Simon Johnson; Editing by Erica Billingham)