Defrauded!

I am so embarrassed.

You may recall that I recently purchased some shares in a Canadian goldminer Crystallex (KRY). Well today at work I decided to check up on it shortly after lunch. It had recently taken a beating and fallen from where I bought it ($3.00) to around $2.82 or so. Well I was delighted to see that the share price had skyrocketed in about 5 minutes from the mid $2.80's to almost $3.00! What could be going on? I checked out my favourite finance blog, billcara.com, and found that someone posted a news article from Dow Jones newswire time-stamped at 1pm stating that KRY had received their environmental permit!

Yippee! This is what I had been hoping for! The long awaited permit! The share price was sure to double! Or triple! Perhaps it wasn't too late to buy more shares?!? The news was just released minutes ago!!!

So, fool that I am, I put in a limit order for 300 shares at $3.25. The order was immediately filled at $3.04/share. It was my "lucky" day.

...........except, it turns out the news story was a complete fraud:

Crystallex's Share Price Jumps On Fraudulent News Report

Jan 30, 2007 15:30:00 (ET)

CARACAS (Dow Jones)--A fraudulent news story Tuesday on the Venezuelan operations of Canadian miner Crystallex International Corp. (KRY) pushed the company's share price up nearly 10% before profit-taking pared the gains.

The fake article, which resembled a Dow Jones Newswires report, claimed that Venezuela had at last approved a long-awaited environmental permit for Crystallex to begin exploiting the Las Cristinas gold mine.

The phony report was posted on a Yahoo message board. Shortly after it appeared, Crystallex's share price on the American Stock Exchange rose as high as 9.3% to $3.07 before the gains were trimmed. The stock stood at $2.96 per share, up 6.1%, at 3:23 p.m. EST.

Crystallex officials have denied the report. "As of now we're just fielding questions from investors," said Richard Marshall, vice president of investor relations for Crystallex. The company has yet to decide on other actions such as contacting the U.S. Securities and Exchange Commission, he said. "We'll bring it up with our board and to (legal) counsel to see what we can do."

The bogus story included a fabricated quote attributed to Venezuelan Mining Minister Jose Khan.

-By Raul Gallegos, Dow Jones Newswires; 58-212-564-1339; raul.gallegos@dowjones.com

KRY is currently trading back down at $2.88 and I am $60 poorer.....or wiser (depending on how you look at it). I have learned three very important lessons:

1. Price action, even the high volume price action that happened today, may not mean anything.
2. Never trust anything people post on the internet about a stock, even when it is supported by an observable price movement in the market.
3. I am a moron.