Phony press releases are a big thorn in the sides of many multinational companies. These big shots may dominate the stock market, but they're struggling to keep the fake news out of prestigious papers
PARIS — It was a first in France when, in 2016, the construction company Vinci was targeted by a fake rumor claiming their financial director had been fired and major accounting errors had been committed. Yet many similar incidents had already occured abroad. In the United States, for instance, corporations like Bank of America, General Electric, Pfizer, Intel, Shell, Chevron and. Google had all been victims of fake press release scams. In Europe, Ryanair, the EIB (Europe Investment Bank) and G4S, a British group specialized in security services, have also been subjected to this type of fraud.
These hoaxes haven't died down. On April 1 2021, a phony press release claimed that the Portuguese oil group Galp was giving up its involvement in northern Mozambique to pursue a "100% sustainable future." In 2019, BlackRock and its leader Larry Fink were also victims of identity fraud. A false letter, supposedly written by the asset manager, stated he would sell his shares to companies that would not meet the targets of the Paris Climate Agreement. This simple email managed to fool several leading media outlets, including the Financial Times.
A fake press release is sent through a fake email address, with a link referring to a fake press room and a fake phone number.
The hackers behind these scams are pursuing two different kinds of goals. The first is stock market gain: They seek to influence the stock markets after having positioned themselves to capitalize on the market fluctuations provoked by their fake news. The second goal is to undermine the company's reputation. In this scenario, the perpetrators are political activists, environmentalists and anti-liberals. They almost always employ the same method: A fake press release is sent through a fake email address, with a link referring to a fake press room and a fake phone number allowing to call a fake press office. Even if the journalist calls to check the information, he or she will be confirmed it is authentic — even though it's not.
Google offices in New York, USA. — Photo : Richard B. Levine/Levine Roberts
These operations are costly to companies, both in terms of stock market impact and reputation. In 2019, a study from the American University of Baltimore estimated the cost of these scams at $17 billion in the United States. French corporations are also taking the situation very seriously. For the past two years, a dozen listed companies from the CAC 40 — a French benchmark stock market index — such as AXA, BNP Paribas, Crédit Agricole, Engie, Air Liquide, Schneider, L'Oréal, Renault and Bouygues have purchased a tool that allows them to fight against fake news.
With just one click, the company can encrypt the data they want to share in the blockchain.
The French company Wiztopic has developed a product called Wiztrust that allows all financial communication media (press releases, financial results, photos) to easily certify this kind of information. With just one click, the company can encrypt the data they want to share in the blockchain. This way, journalists and investors can ensure — in real time — that the released information belongs to the company itself. Last January, Wiztopic signed a partnership with Euronext, which will be commercializing the tool to issuers who want it. This contract is very likely to speed up the growth of this technology. In any case, it will open up markets in the Netherlands, Portugal and Northern Europe. Perhaps it will eventually solve this pesky problem for corporations worldwide.