Hoax Analyst Showing Up On Earnings Calls

from the six-sigma-indeed dept

I don't follow the process behind earnings conference calls too closely, but apparently there's an element of trust involved. People dial in, tell a moderator who they are, and a bunch of analysts from the most well-known firms are allowed to ask questions. That system is ripe for gaming, and apparently, some unknown guy has been doing exactly that over the past few months, calling into earnings calls and getting to ask questions by pretending to be someone else. No one seems entirely sure what game the guy is playing -- but it doesn't appear to be an attempt to hoax the overall system or be a practical joker -- as his questions aren't amusing. He just brings up odd questions about operations: supply chain initiatives, lean manufacturing, six sigma, etc. That has some believing that he's really working for some consulting firm, either trying to dig up dirt on other company's operations, or even trying to kick up more interest in supply chain work. Either way, it's fairly amazing to find out how the conference call system works and how easy it is to game. It's surprising that this hasn't been done more frequently, honestly. In response, some firms are now handing out special codes to analysts to let them ask questions in future conference calls, rather than just relying on who people say they are -- though, of course, that brings up a different issue: what's wrong with letting people other than your preferred analysts ask questions?
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Filed Under: analyst calls, hoax

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  1. identicon
    Rachel, 22 Feb 2008 @ 6:36am

    Conference Calls

    I'm just wondering how this guy is getting into these calls in the first place. I am actually work for a conference provider and I am a conference operator. Yes, I'm the person who opens the call and turns it over to the chairperson, conducts Q&A's, etc. And it's not like just anyone can call in and join any call. It is more complex than that... at least with our company. Not sure about other providers. But each client hosting a conference call is provided with their own dial-in number (which means we have thousands of telephone numbers) and they are also provided with their own conference ID number. The dial-in numbers and conference ID numbers are then emailed to participants. So it's not like just anyone can call in and request to be joined to any conference... you have to get the dial-in number first, you have to know the conf ID #. Also, if it is a high-priority call, the client can always set up a password to reference in order to join the conference, or they could send us a list of participants who are allowed into the call. And if someone calls in who is not on the list, they are turned away. That is the best way to ensure that everyone in the call is legit. But anyway, our company sent out a memo yesterday informing us of the situation and what to do if it happens to us. So I'm not sure how other conference providers work in terms of security, there are precautions that everyone can take - the client and the conferencing provider - to prevent situations/hoaxes like this from happening.

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