Insider Accused Of Emulex Press Release Hoax

The U.S. Attorney's office is accusing Mark Simeon Jakob of tricking his former employer, Internet Wire, into publishing a false press release that sent the stock of data network equipment maker Emulex Corp. down 62% on Aug. 25. Federal investigators say that before Jakob quit Internet Wire, he used company computers to take several large stock positions--in Emulex.

Jakob, a 23-year-old former student of El Camino Community College in Southern California, was arrested Thursday and accused of securities and wire fraud as a result of sending the bogus press release. The stock largely recovered after the hoax.

Investigators claim Jakob made a hefty profit on the ruse: about $240,000 from short-selling the stock--a tactic that pays off when a stock falls--and on a purchase made when the stock hit its nadir.