NEW YORK, Nov 26, 2012 - A bogus news release prompted several websites to run incorrect articles about Google making a $400 million acquisition of a wireless company on Monday, the target company ICOA said.

“This was a hoax. We are investigating the source,” said an emailed statement from George Strouthopoulos, chairman and chief executive of ICOA, the wireless firm Google purportedly was acquiring.

The reports began after the fake release was posted on the PRWeb site which is owned by the cloud software firm Vocus.

“This is NOT TRUE!!” Strouthopoulos said in an email. “Never had any discussions with any potential acquirers!! This is absolutely false!”The executive added that “someone, I guess a stock promoter with a dubious interest, is disseminating wrong, false and misleading info in the PR circles.”

He said the fake release appeared to come from Aruba, and added that ICOA “will report this to the proper authorities.”For several hours, reports were circulating that Google had made the purchase as part of an effort to moving into wireless communications. Google officials refused to confirm the news about an acquisition.

The Rhode Island-based ICOA saw a spike in price and volume in morning trade in over-the-counter “pink sheets” trades in stocks which are not listed on major exchanges.

The incident suggested a so-called “pump and dump” scheme in which false information is leaked, allowing a speculator to profit from rapid buying and selling. These schemes are illegal under US securities laws.

Because ICOA shares trade at just fractions of a cent, a small movement could allow a short-term trader to make, or lose millions, on these rumors.

The Securities and Exchange Commission declined to comment on the matter.

Google shares were little changed on the news, closing down one percent at $661.15.

Frank Strong at PRWeb acknowledged said the service learned after transmitting the release that it was “fraudulent.””Even with reasonable safeguards identity theft occurs, on occasion, across all of the major wire services,” he said. “We have removed the fraudulent release and turned the matter over to the proper authorities for further investigation.”