A handful of finalists in CNBC's Million Dollar Portfolio Challenge may have exploited a software glitch in the contest's trading system to pump up their stock gains.
The contest, which awards $1 million to the player whose stock portfolio records the greatest increases, had a software flaw in the trading system that allowed contestants to register stock trades before the 4 p.m. trading deadline and then execute some of the trades later in the evening, BusinessWeek reported on Thursday. A number of contestants appeared to have used the technique to trade heavily in companies that announced earnings after hours, only buying stocks of companies that had positive earning announcements.
CNBC announced on Friday that it had opened an investigation into that allegation and two others.
"Integrity is paramount to CNBC," the company said in a statement. "We are taking all allegations of improprieties very seriously. CNBC will provide updates on the air and on CNBC.com as they become available."
CNBC's contest is not the first to allege cheating by computer hacking. In 2005, a hacker exploited a glitch in the ApplyYourself online application and notification program to help business school applicants find out whether they were accepted at top schools such as Harvard, Stanford and Dartmouth. High-school students have frequently been charged with hacking school computers in an attempt to affect their grades or as a prank. And earlier this year, U.S. lenders were accused of improperly accessing the data of student-loan recipients.
CNBC has retained the services of two computer security experts and a financial securities analyst to investigate the allegations, the General Electric subsidiary stated. CNBC will announce the finalist on July 8.
Posted by: Robert Lemos