On October 3 at 9:15 am CNN iReport (user reported news featured by CNN ) ran the following story:

"Steve Jobs was rushed to the ER just a few hours ago after suffering a major heart attack. I have an insider who tells me that paramedics were called after Steve claimed to be suffering from severe chest pains and shortness of breath. My source has opted to remain anonymous, but he is quite reliable. I haven't seen anything about this anywhere else yet, and as of right now, I have no further information, so I thought this would be a good place to start. If anyone else has more information, please share it."[1]

News of the heart attack of Steve Jobs, CEO of Apple, quickly circulated through other formal media sources, the blogsphere, and became a major topic on social networking sites such as Twitter. [2]

The impact on Apple stock was dramatic with a decrease in value within minutes by almost $11 dollars per share. This drop destroyed more then $7 billion dollars from Apple's market capitalization. [3]  

The only problem with this CNN iReport was it was completely FALSE. Denial from Apple happened moments (9:57 am) after they were made aware and yet the story continued to run on iReport for at least ten more minutes, being removed by CNN at around 10:20am.[1]  By the end of the day Apple stock had recovered to $104 per share.[4]

Concern has arisen that the hoax may have been an attempt to purposely drive down Apple stock value prompting an investigation by the U.S. Securities  and Exchange Commission. CNN has emphasized that it "makes no guarantee about the content" of the iReport site, removed the fraudulent post as soon as they were aware it was untrue, suspended the user account, and are cooperating withe the SEC investigation. [5]

While it is easy to focus on the lack of reliability in so called "citizen journalism" it is interesting to note that just about a month prior an error in publication by Bloomberg caused United Airlines stocks to temporarily drop by 75%.  In that case, Bloomberg rebroadcast a report from Income Securities Advisors (financial news company) which had inadvertently reported a six-year old story about United Airlines filing for bankruptcy as being new breaking new due to confusion about the date returned from a Google search on bankruptcies.[6]

Wired summarizes how Internet republishing has changed the nature of fact checking:  "Prior to the internet, if a news outlet like Bloomberg picked up information that another news publication broke, Bloomberg would have made phone calls to vet the information -- as much as that was possible -- before publishing its own story about the subject. That still happens in the case of articles that are published in the print versions of newspapers. But that happens much less with information that's picked up on blogs, and it almost never happens with information that's picked up by online mailing lists and newsletters."[6]

[1] "Apple Denies Steve Jobs Heart Attack Report:  It Is Not True", Henry Blodget, Silicon Valley Insider, October 3, 2008, http://www.alleyinsider.com/2008/10/apple-s-steve-jobs-rushed-to-er-after-heart-attack-says-cnn-citizen-journalist
[2] Image from Twist, see http://twist.flaptor.com
[3] "Report:  SEC Investigating False Steve Jobs Heart Attack Rumor", Jordan Golson, The Industry Standard, October 3, 2008, http://www.thestandard.com/news/2008/10/03/report-sec-investigating-false-steve-jobs-heart-attack-rumor
[4] "Apple Denies Report of Steve Jobs Heart Attack" Reuters, October 3, 2008, http://biz.yahoo.com/rb/081003/business_us_apple_jobs.html
[5] "SEC Examining False Report on Apple Chief Jobs", Connie Guglielmo, Bloomberg.Com, October 3, 2008, http://www.bloomberg.com/apps/news?pid=20601087&sid=a0NPvJx.wJoo&refer=home
[6]"Six-Year-Old News Story Causes United Airlines Stock to Plummet -- UPDATE Google Placed Wrong Date on Story", Kim Zetter, September 8, 2008, Wired, http://blog.wired.com/27bstroke6/2008/09/six-year-old-st.html