NASD fines analyst for circulating rumour
Walter Piecyk, a research analyst with Fulcrum Global Partners LLC in New York, spread a rumour that RF Micro Devices' largest client, Nokia Corporation, was delaying equipment orders to the company.
Piecyk did not conduct a reasonable inquiry into whether there was a basis for the rumour. He circulated the rumour via instant messages and telephone calls to at least eight of Fulcrum's institutional clients.
As he circulated the rumour, Piecyk sold short a total of 3,000 shares of RF Micro Devices. Piecyk closed his short position in October 2002, earning a profit of US$7,815.
RF Micro Devices' stock price declined during the morning of August 22, 2002 by about 10%, due at least in part to the rumour. The company had to publicly deny the rumour in the afternoon and the market price recovered before the end of the day.
Piecyk's failure to conduct a reasonable inquiry into the rumour and his circulating the rumour to his firm's clients constituted a violation of NASD Conduct Rule 2110. Piecyk neither admitted nor denied the charges.
