CNBC reports 'unusual trading' in own contest
EmptyNEW YORK - Financial news network CNBC may not have to look far for its next insider trading feature.
The cable network said on Wednesday that it is investigating whether entrants in its "CNBC Million Dollar Portfolio Challenge" contest engaged in illicit trading to boost their results.
"CNBC has been contacted by several contestants alleging unusual trading in violation of contest rules among some of the 20 finalists," the cable news network said in a statement.
"Once these questions were raised, CNBC immediately launched a thorough investigation to determine who may have violated the rules," it added.
The probe was looking at "unusual trading" and "potential irregularities," CNBC said.
As part of the portfolio challenge, CNBC provided "aspiring moguls" with a fictional trading account, one million "CNBC Bucks" and the ability to trade individual stocks on U.S. exchanges.
A grand prize of $1 million was set to be awarded to the entrant that generated the highest portfolio returns between March 5 and May 25.
A CNBC spokesman said about 375,000 contestants had entered the challenge with a total of over 1.5 million portfolios. The winner was to have been declared by July 8, but the network said it was unsure if it would be able to do so.
The celebrity portion of the contest, "where stars traded for their favorite charities," was unaffected by the investigation, a CNBC reporter said.
Insider trading scandals have grown in recent months as suspicious trading activity proceeded deal announcements like the proposed leveraged buyout of Texas power company TXU Corp. and News Corp.'s surprise offer for Dow Jones.
Just a day before the contest investigation was announced, CNBC's Lee Brodie posted on the cable network's Web site, "Wall Street appears to be living in an 80's time-warp. Back are the corporate raiders, the heavy deal-making, and if suspicious stock movement is any indication: insider trading."