Yesterday, the SEC uncorked a wide-reaching investigation into the actions of stock promoters who are alleged to have published bullish articles on specific stocks in exchange for payment from the companies they covered between 2011 and 2014. Many of the articles cited by the SEC were published on Seeking Alpha. Note that while some of the details are fresh, the story is not. It was first broken by Seeking Alpha back in 2014 (more below).
These bad actors chose to abuse Seeking Alpha because Seeking Alpha has a reputation and audience without comparison. They targeted Seeking Alpha because our content is differentiated, informed and highly regarded by institutional and individual investors alike.
For reference and transparency, here's a list of the alleged articles and authors (.pdf).
I suspect that the SEC's investigation was largely prompted by Richard's work, as published on Seeking Alpha. We are proud of that.
At the time, we took affirmative steps to bolster our author integrity policies, including:
- Ticker monitoring and blacklisting: We proactively monitor websites that keep tabs on stocks that are being promoted. When an article on a stock that is suspected of promotion is submitted, the article must be reviewed by a managing editor. We have also blacklisted certain stocks from publication altogether in order not to fall prey to promotion.
- IP tracking: We deployed IP tracking in our content management system ("CMS"). We now cross-check article submissions against each other.
- ID verification: In cooperation with identity verification provider IDology, we deployed a system to validate contributors’ identities.
- Zero-tolerance policy: A contributor found to have cooperated with stock promoters is no longer allowed to publish, no exceptions. We also report this to the SEC.
- Leveraging our audience: We created an email hotline (firstname.lastname@example.org) for any reader who suspects potential manipulation to email us confidentially. All reports of potential manipulation are investigated promptly.
I wrote about those steps and our ongoing commitment to integrity here.
With yesterday's investigation, the SEC documented the authors/articles that were allegedly complicit in stock promotion. We have removed these articles from Seeking Alpha; they have no place among the 75,000-plus articles we publish every year.
We constantly address and evolve our techniques and methodology to systematically identify this type of behavior. We will continue to collaborate with the SEC as part of this effort. At every juncture, we favor the transparency necessary to allow our readers to make informed decisions.
This is a warning shot to any would-be bad actors that would seek to capitalize on Seeking Alpha’s reputation and audience.
As Seeking Alpha's CEO and Editor-in-Chief, I remain committed to our community and readers, who have made us the single largest and most informed investor community in the world.
Crowd-sourced investment research is the future of investment research. A few bad actors are not going to force the genie back into the bottle and return investors to the more conflict-prone paradigm of Wall Street research.