Bloomberg Sues Over Web Hoax

Bloomberg filed a lawsuit in New York against the unidentified people who posted and promoted a bogus report last week on the Internet that boosted the value of a Tustin firm’s stock 31% before the hoax was exposed. The lawsuit in U.S. District Court in Manhattan will help the global financial news service learn the real identities behind the screen names of those who joined the scheme, said Richard L. Klein, a Bloomberg lawyer. Someone copied the Bloomberg page design and created a false news story that caused the dramatic increase Wednesday in the trading value of PairGain Technologies, a maker of telecommunications equipment. The report said PairGain would be acquired by an Israeli firm, ECI Telecom, for $1.35 billion, or about twice its market value at the time. That day the value of PairGain stock rose as high as $11.13 from a closing price the previous day of $8.50.