Shares fell by over 60% when a press release appeared on the Internet Wire news dissemination service that claimed the company’s chief executive was resigning, that the company would restate its fourth quarter earnings, and that Emulex was under investigation by the Securities and Exchange Commission. The release was picked up by and displayed on other on-line news services.
Emulex said the claims were fictitious and categorically false. Chief Executive Paul Folino said: “Emulex shareholders should be assured that our business is at record levels and the fundamentals of our business and my commitment to this company have never been stronger."
Trading in the company was stopped by Nasdaq when the hoax became apparent. When trading resumed, the stock rapidly recovered to close just 6.4% down. Investigations are underway to trace the hoaxster.