The wait goes on.
The cable channel CNBC originally planned to announce the winner in its million-dollar stock-picking contest this past weekend. But instead, the investigation into "unusual trading" by some contestants continues with no indication of when a champion will be crowned.
The final round of the contest ended May 25 and CNBC, a division of General Electric (GE), has been probing allegations of cheating in the contest since May 30.
As BusinessWeek first reported, a handful of top finalists are suspected of exploiting a flaw in the contest's trading software to amass outsized returns (see BusinessWeek.com, 6/7/07, "CNBC's Easy Money"). And at least one other participant is alleged to have selected for his contest portfolio a series of thinly traded stocks that could have been susceptible to manipulation in the actual market (see BusinessWeek.com, 6/14/07, "Is This CNBC's Million-Dollar Winner?").
To investigate the allegations of market manipulation, CNBC retained former Securities & Exchange Commission enforcement chief and retired federal judge Stanley Sporkin; Chicago-based computer consultancy Neohapsis and tech security giant Symantec (SYMC) would probe possible software problems, the channel announced (see BusinessWeek.com, 6/15/07, "CNBC Calls In a Judge").
From the beginning of its investigation, CNBC has said it aimed to meet the July 8 deadline for announcing a winner based on the contest's rules. But the channel has repeatedly said it will not rush its review to do so. "The integrity of the contest will drive this process," CNBC said in a June 15 release. "We anticipate meeting the date of July 8, 2007, contained in the rules. However, we will not declare a winner until the investigations are complete."
A Winner in the Wings
It's unclear exactly how CNBC will decide on a winner. The channel could run the entire contest again from scratch, or it could rerun the final round, allowing some or all of the 20 finalists to participate. It could also award the prize money to the highest-scoring finalist who did not engage in any questionable activity.
If the latter method is used, BusinessWeek's analysis of the trading results suggests that the most likely winner is Mary Sue Williams, a waitress who has never bought or sold a real stock in her life (see BusinessWeek.com, 6/20/07, "The Million-Dollar Waitress"). She secured a place in the final two-week round of the contest by picking stocks she knew, such as WD-40 (WDFC) and Crocs (CROX). In the finals, she saw a return of 17%, good for sixth place in the last published standings.
A day after the deadline passed, a CNBC spokesman said the channel had nothing to add to its previous statements. Sporkin and Neohapsis President Brooke Paul declined to comment on the state of the investigation or their roles in it. Symantec did not return calls seeking comment.