Gary Dale Hoke, who worked for the North Carolina office of PairGain Technologies, was arrested at home in Raleigh, and charged with securities fraud. He was released on bail of $50,000 (pounds 31,000) after agreeing to appear in federal court in Los Angeles, where the company is based.
The Internet posting was dressed up to look like a news report from Bloomberg, the financial information provider, in which it was said that PairGain had agreed to a takeover bid from an Israeli company, ECI Telecom. PairGain's share price jumped from $8.50 to $11.125 before falling after the hoax was revealed.
It was the second time in less than two weeks that federal agents have tracked an online troublemaker, following the arrest of a New Jersey man believed to be behind the Melissa virus which flooded hundreds of thousands of computers with junk e-mail.
Mr Hoke was not formally accused of profiting from his fake posting.Reuse content