It can be shocking how fast inaccurate information travels.
The instance of UAL Corporation, the parent company of United Airlines (UAUA), being brought down--at least temporarily--by a completely inaccurate headline shows the problems that can result when the fast-paced, highly competitive world of real-time financial journalism messes up.
United briefly saw the value of its stock vanish in a matter of seconds on Monday. The company was the victim of a headline crossing over Wall Street's trading screens that claimed the airline was filing for bankruptcy. But wait, you might think--hadn't the airline already been in bankruptcy not too long ago?
The headline was from a story that was six years old.
“I think everybody in the business was extremely disturbed by what happened, however it happened,” said Michael James, a trader with Wedbush Morgan Securities in Los Angeles.
United spokeswoman Jean Medina called the posting of the story and headline "irresponsible."
"This is what happens when you're careless and don't check facts," she said.
Bloomberg L.P., the news and financial company whose terminals sit on thousands of trading desks at investment banks throughout the world, was the financial media company that ran the headline.
A Bloomberg spokeswoman said one of the company's third-party contributors found a story and posted it via third-party publishing software. Unfortunately, the story was originallypublished in December 2002. Bloomberg pulled the headline from its system once the story was seen as untrue.
The problem, media commentators said, was that there wasn’t a human or computer backstop between the Sun-Sentinel, where it was originally written, the third-party contributor that picked it up, and Bloomberg's terminal screens.
“It points out the darker side of this information revolution we’ve had,” said Brent Cunningham, managing editor of The Columbia Journalism Review.
On Wall Street, especially on the trading floors, the mantra is “act first, think later.” Traders often don’t have the time to read articles when making financial decisions. They frequently act off a headline or even something as small as a number.
“We operate in real time like the stock market, no matter where [the news] comes across,” James said.
Because traders act with so little to go on, it becomes even more important for journalists--especially financial journalists--to make sure everything coming through their news outlet is as accurate as possible, said Chris Roush, business journalism professor at the University of North Carolina, Chapel Hill, and editor of the industry blog “Talking Biz News.”
“Without assigning blame on who possibly caused this mishap, somebody needs to create some sort of stop gap where software or a human being can manually approve important headlines before they head out,” he said--for example, financially sensitive issues like bankruptcy, liquidation or court rulings should at least see a pair of eyes before they head out.
“The news organizations need to revisit how they operate, especially with how fast information moves,” Roush said. “If I were a United shareholder, I would think about a class-action lawsuit against Bloomberg or their third-party content providers.”
While news organizations should always be careful, more attention should be paid to companies or industries already suffering, like the airlines or the beleaguered financial sector.
“All it takes is for someone to say ‘wait a minute’ and call United or call the content provider,” Cunningham said.
It’s never going to be a perfect system, traders and journalists admit. There are two forces working against accuracy: the Internet, where anyone can post anything at any time, and the quick-acting nature of Wall Street.
“The digital age requires safeguards built into our news gathering and dissemination process,” Cunningham said. “What’s so troubling is nobody thought of picking up a phone. As an industry, we should really think about slowing down a bit.”
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