General Mills investigates hoax press release

General Mills Inc has begun investigating a hoax press release that said U.S. President Barack Obama had ordered a probe into the cereal maker's supply chain.

The release was sent around midnight Eastern time on PR Newswire, a large U.S. distributor of corporate press releases and a unit of Britain's United Business Media Ltd .

Some major news media outlets reported contents from the release before the hoax was confirmed.

The fake release said Obama late Tuesday evening ordered a full investigation into the General Mills supply chain in most major global markets following voluntary recalls on food products, most notably its cereal and fast food items in the US, UK, Europe and Asia.

General Mills spokeswoman Kirstie Foster said: The release was entirely false.

The U.S. Consumer Product Safety Commission's last posted recall for General Mills dates from 1999, though the company did recall some Nature Valley granola nut clusters last July as a precaution because of possible tainting with salmonella.

General Mills has dozens of food brands, including Cheerios, Green Giant, Haagen-Dazs, Pillsbury and Wheaties.

PR Newswire and Business Wire, a unit of Warren Buffett's Berkshire Hathaway Inc , dominate the U.S. market for distributing corporate press releases. General Mills uses Business Wire, but said some brands use PR Newswire.

In a statement, PR Newswire said it has stringent editorial procedures and safeguards to thwart hoaxes, and breaches are extremely rare. It said it has alerted regulatory authorities and will cooperate in any probe.

General Mills said it is also investigating, and law enforcement is involved.

Fake releases are often issued to manipulate stock prices. The fake General Mills release is the latest in a series of hoaxes targeting publicly traded companies.

Last July, several media outlets received faxed statements on a Sunday about a nonexistent buyout offer for audio equipment maker Harman International Industries Inc .

And in 2000, Emulex Corp shares plunged 59 percent in 16 minutes after a fake release said it was lowering reported results, its chief executive was stepping down, and the U.S. Securities and Exchange Commission was probing the company. The sender later received a 44-month prison sentence.

DETAILS

The fake General Mills release carries a New York dateline while General Mills is based in Minneapolis, spells yogurt as yoghurt, and has a contact phone number located in New Zealand. In addition, the contact person is shown as Steve Sanger, a former General Mills chief executive.

Reuters sent out headlines based on the press release and later withdrew them. Its rival Dow Jones Newswires, a unit of News Corp , published a story based on the release which appeared on The Wall Street Journal website.

General Mills said Fox Business News, also owned by News Corp, also posted incorrect material.

The false release was issued by a press release service and as part of a direct feed was published on Dow Jones Newswires, Dow Jones spokeswoman Emily Edmonds said. A kill notice was issued, and a subscriber notice was immediately published on the wire.

Reuters said: Reuters issued an advisory to clients as soon as it was discovered that the press release was a hoax.

A call made to the number shown on the fake release was answered by a man who identified himself as Tom Reed.

People have been calling all day, he said, declining to provide more detail because he had dinner guests.

Sanger was not immediately available for comment.

Shares of General Mills were up 0.5 percent at $38.36 in late afternoon trading on the New York Stock Exchange.

(Additional reporting by Brad Dorfman, Christopher Kaufman and Jennifer Saba; Editing by Gerald E. McCormick and Lisa Von Ahn)