Recently, our editors were forced to remove a number of articles from Seeking Alpha after we discovered that their authors had been compensated by stock promoters to publish positive articles on specific stocks. In their disclosures, the authors lied - explicitly stating that they were not receiving third-party payment for their articles. To be clear: Seeking Alpha does not allow paid stock promoters or IR firms to submit articles about stocks with which they have a relationship.
We are grateful to Richard Pearson for his outstanding undercover work in unearthing foul play on Seeking Alpha and other investing websites, and for sharing his research with us proactively so that we could deal promptly with non-compliant authors. You can read Richard’s recent articles on this topic here and here.
This discovery has led us to re-examine our contributor due-diligence policies, and to implement the following safeguards:
- Ticker monitoring and blacklisting: We now monitor a number of websites that keep running tabs on stocks that are being actively promoted. When we receive an article on a stock that is suspected of promotion, the article must be reviewed and approved by a managing editor. We have also blacklisted certain stocks from publication altogether in order not to fall prey to promotion.
- IP tracking: We recently deployed IP tracking in our content management system. We are now able to cross-check article submissions against each other, which has helped us uncover a number of contributors submitting under false identities.
- ID verification: In cooperation with IDology, we are deploying a system to validate contributors’ identities by matching our information against publicly available databases. In cases where we're unable to validate a contributor's identity, we require them to submit official photo ID which IDology can independently validate.
- Zero-tolerance policy: Any contributor found to have cooperated with stock promoters will have his contributor status permanently revoked, no exceptions.
- Leveraging our audience: Stock promotion/manipulation has many shapes and colors. Sometimes it’s easy to identify, sometimes it’s not. We have created an email hotline for anyone who suspects potential manipulation to email us confidentially. All reports of potential manipulation will be taken seriously and investigated promptly. If you see a potentially problematic article, or have knowledge of a contributor who is receiving outside payment, please email firstname.lastname@example.org.
We take the integrity of our website and community very seriously. It would be foolish of us to imagine that the steps above are comprehensive, or that we’ll implement them perfectly. I have created an internal brainstorming list in which I’m collecting any and all ideas we have about how to further protect the remarkable community we’ve fostered. If you have ideas as to how we can prevent stock manipulation on Seeking Alpha, and make our community even greater, please send them to me (email@example.com) and I’ll add them to my list.
This will not be the last you’ll be hearing from me on this topic.