Net shows frailty again as hoaxer hits Emulex

Emulex is a company most people outside a small band of enthusiastic investors will never have heard of before this week. Perhaps, you still haven't. Listed on the US Nasdaq index, the company is one of the world's largest suppliers of fibre optic communications equipment.

Last week, a bogus press release, purporting to come from the company, alleged that it had inflated previous profits and was being investigated by the Securities and Exchange Commission. It also said the company's chief executive had resigned. Unsurprisingly in the current nervous market for technology stocks, the news when circulated was enough to wipe 60 per cent off the firm's value.

Attention quickly focused on those who might gain from such news and a 23-year-old student has since been arrested. A former employee of the Internet wire service that first posted the press release, he made $250,000 from the deal. But for the wider community, the bigger story is the ease with which such bogus stories can undermine stable companies and it has added to the air of uncertainty surrounding the Internet.