Fake financial news: what to look out for and how to stay safe

Before making any investments, you need to be well informed and make sure that you don’t fall victim to fake news designed to influence your decisions. False financial news can be particularly sophisticated and hard to detect. But don’t panic! myLIFE will walk you through how to spot fake news and protect yourself.

Today, everyone is familiar with ‘fake news’, a term born of the digital age and popularised by United States president Donald Trump that encompasses a number of different phenomena. The original meaning of the term is disinformation – the deliberate dissemination of false, incorrect or misleading information with the intention of harming a person, an institution or a company, influencing opinions or fraudulently profiting. Fake news also comprises misinformation, the unintentional spread of false information through carelessness or haste. While the existence of fake news is not new, the unprecedented speed of its spread is the result of the emergence of digital channels such as social media, amplified by the existence of politically or financially motivated ‘troll farms’ that deliberately create and expand disinformation.

According to a Eurobarometer survey, around two-thirds of Europeans were regularly exposed to fake news in 2025.

In the fast-paced digital age, we often share sensational information before bothering to verify its truthfulness. As a result, fake news spreads rapidly, infecting many people before being debunked – with some recipients never receiving this correction. From influencing election results to affecting health-related behaviour, the negative impact of fake news is well documented. During the Covid-19 pandemic, the United Nations’ World Health Organisation even referred to an “infodemic”, highlighting the similarities in spread of fake news to the virus itself.

According to a Eurobarometer survey, around two-thirds of Europeans were regularly exposed to fake news in 2025, rising to as much as 76% among younger people, although now more than 60% are confident they can distinguish between fake news and genuine information (70% among young people).

Fake financial news: some examples

In finance and investment, fake news can have a severe impact on companies and investors. Often more sophisticated than political or social disinformation, it can be harder to spot, and even reputable news agencies have sometimes struggled to identify fake news, which can come in many forms: fake press releases, widely circulated rumours, false advice from pseudo-experts, financial jargon. Here are a few examples that have shaken the financial industry in recent years.

• • On November 22, 2016, Bloomberg, AFP, Reuters and other media outlets received a press release by email that appeared to have originated from the press office of French construction group Vinci. The statement reported the company had uncovered irregularities which were concealing losses amounting to €3.5bn and would restate its 2015 and 2016 accounts, while Vinci’s chief finance officer had been dismissed. The information seemed to be authentic and was widely reported by the media, precipitating an 18% drop in Vinci’s share price within minutes. Despite the company’s rapid issue of a denial, its share price remained 4% lower at the end of the trading day.
  • In spring 2022, the share price of US start-up Lithium Corporation soared by 250% within half an hour after a fake press release announced its acquisition by Tesla. Although the electric car manufacturer’s CEO Elon Musk had posted on the platform then known as Twitter about the need to secure lithium supplies, he had never had any contact with the start-up. Sawyer Merritt, one of Tesla’s best-known enthusiasts, failed to verify the fake news and spread it to his audience, and the number of trades in Lithium Corporation’s stock increased 100-fold in one day. The authors of the fake press release, who had bought shares in the company before launching the rumour, profited handsomely.
  • Because fake news can be so lucrative, some companies have specialised in creating false pieces of information to serve the interests of unscrupulous clients. In 2017, several contributors to independent financial news platform Seeking Alpha were approached by communication companies willing to pay them for publishing false articles advising investment in certain securities. The attempted fraud was uncovered thanks to a whistleblower.

Many large companies, such as Bank of America, General Electric, Pfizer, Intel, Shell, Google and BlackRock, have fallen victim to fake news of various types. While the consequences can be significant, in the vast majority of cases the information can be identified as false relatively quickly. However, the financial impact can sometimes be serious, and smaller companies are particularly vulnerable since fake news about them is less likely to be detected immediately. This makes it easier for fraudsters to profit, and harder to quantify the impact of fake news on smaller businesses.

The development and widespread use of artificial intelligence is increasing the sophistication of fake news, especially in the form of images. In May 2023, a fake AI-generated image showing thick black smoke near the Pentagon was widely shared, causing a brief 0.26% drop in the S&P 500 share price index. This image was widely shared on Twitter by the Russian state media outlet RT, as well users impersonating recognised news providers such as Bloomberg. Although financial markets were shaken, they quickly recovered when it became clear that the image had been fabricated.

Individual investors are most vulnerable, which is why it is so important to understand the mechanisms behind fake news in order to protect yourself.

As these examples demonstrate, fake news can have a significant impact on financial markets, although fortunately it is often temporary, until market professionals verify the information. However, in the meantime, companies can lose a lot of money, and unverified sharing on social media can result in harm to individual investors. Panicking investors might sell shares and incur heavy losses if they fail to wait until verification of the information leads to a market correction. Individual investors are most vulnerable, which is why it is so important to understand the mechanisms behind fake news in order to protect yourself.

How does fake news infect us?

Why does fake news have such a disruptive power? Fake news spreads rapidly online, and our brains can succumb to the illusory truth effect, which involves mistaking familiarity for truth. We confuse plausibility and repetition with truth, making widely-spread news seem more credible.

Digital algorithms can polarise opinions when they act as echo chambers, amplifying the spread of fake news shared by one’s social circle. The aura of veracity is difficult to resist unless you consciously question this repeatedly shared ‘truth’.

Convincing and widely shared fake news, such as falsified but official-sounding announcements about the collapse or acquisition of a company, can generate strong emotions including fear, anger or excitement, leading to over-reaction and impulsive decision-making. Fake news plays on emotions including panic and excitement, which are poor guides since they favour over-reaction at the expense of reflection.

Even when debunked, fake news can leave lasting doubts, affecting your investment decisions.

Not only is it difficult to take a step back, but these emotions also have the power to root information deeply in our consciousness. Even when debunked, fake news can leave lasting doubts, affecting your investment decisions about the financial health of a company, for example, and make you doubt the value of investing in it.

How can you protect yourself from fake news?

You can learn to detect and protect yourself from the disruptive power of fake news better by following these tips:

• • Learn to slow down. This is both the simplest and the most important piece of advice. By appealing to our emotions, fake news engages our automatic, primitive brain, which reacts impulsively and is prone to making irrational decisions. The answer is to take the time to analyse and verify information presented to you. Do not succumb to the false urgency of selling your assets because of unexpected bad news.
  • Exercise critical thinking and learn to understand your reactions. Most fake news is designed to provoke strong emotional reactions, such as fear or anger. When information generates such emotions, compel yourself to be critical: who wrote this story, and why? Is it promoting a particular goal or investment? What real risk does this represent for my investments? Who benefits from this information?
  • Learn to distinguish between what’s true and what’s plausible. Just because information that is widely shared and reported appears to be true and in line with what you already think does not mean it’s actually true. This generates what’s known as cognitive fluidity, which can help you remember a piece of information but has nothing to do with whether the information is true or not. You should always question yourself when information that generates strong emotions in you is especially easy to accept.

Just because information that is widely shared and reported appears to be true and in line with what you already think does not mean it’s actually true.

• • Don’t share or forward information without checking it. Fake news becomes more widespread and has a greater impact on markets if it’s widely shared by trusted individuals without being challenged. To prevent fake news circulating, you need to help break the cycle of contagion by always verifying information before sharing it. This is good for your own investment portfolio, and for the market as a whole.
  • Inoculate yourself against fake news to protect yourself better. Fake news spreads like a virus, infecting individuals and markets alike. But in the same way as with a virus – at least according to international fake news specialist Sander Van der Linden – you can inoculate yourself against fake news by exposing yourself to it in small doses. Are you familiar with fake news? Analyse fake news critically and examine why it was so effective. Trace its spread and its effects to deepen understanding of its impact.
  • Verify and cross-check sources. Always seek the original source of the information, rather than relying solely on sharing from a colleague, friend or relative. Consider the media or website, the author and their credentials, and check for any mistakes that might indicate it is fake news.
  • Use fact-checking websites. Many platforms now exist to verify the accuracy of both text and images. Use them to ensure that any information you see and forward is correct.
  • Leave it to the professionals. If you feel overwhelmed by the potential impact of a piece of information and are unsure how to react, you can always consult your banking adviser. Financial professionals understand the harmful effects of fake news and are trained to identify it. Financial institutions are increasingly equipped with AI-type tools that can detect fake news. Don’t hesitate to seek assistance before making any hasty decisions about your investments.

As you can see, fake news is widespread in the financial world and can cause significant harm. The key takeaway is to break the cycle of automatic emotional thinking, contagion and sharing. This approach not only protects you but safeguards your contacts and other market participants. Having the right instincts is a matter of collective responsibility as well as individual interest. When confronted with sensational information, stay calm, take a moment, and assess critically whether or not it is true.