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Allegations of cheating are investigated by the people running separate stock-picking contests sponsored by a financial news Web site and by CNBC. One theory is that participants are hacking into the contest’s database to make late changes in picks.

RENEE MONTAGNE, host:

And even when the money is fake, it seems contestants cheat. Last night the financial news site TheStreet.com said it’s canceling the first round of the Beat the Street competition because of fraud. And we reported last month that the financial network CNBC is investigating trading scams on its own contest, Million Dollar Portfolio Challenge. Now some of those contestants are speaking out about what went wrong.

NPR’s Jim Zarroli reports.

JIM ZARROLI: As financial scandals go, this one is no Enron, but it is nonetheless generating its share of Internet chatter. This spring, CNBC held a stock picking contest using pretend money called CNBC Bucks. About 375,000 viewers entered. Then the top 20 finalists were invited back to compete in a second round. The winner would get $100,000, plus an annuity worth $36,000 a year. One of the finalist, Jim Kraber, says he notice that a few contestants always seemed to pick the stocks that were about to issue unusually good earnings reports, which means their price would almost certainly rise. Kraber says this happened so often that it almost defied probability.

Mr. JIM KRABER (Contestant): My theories of what was happening changed each day. For the most part until the second week I thought someone was able to hack into the CNBC database and change their pick.

ZARROLI: The suspicions were shared by at least one other contestant who didn’t want to be named. Bloggers started speculating about what was happening, and soon, Kraber says, a theory developed.

Mr. KRABER: There was a bug in the program and CNBC software that allowed them to make changes after hours.

ZARROLI: He says stock trades were supposed to be processed at 4:00 p.m. Eastern Time at the end of the trading day. But he believes some contestants found a way to get into the database and change the order of their stock picks after the market closed. By doing so they would benefit from any news that broke late in the afternoon, like an unusually good earnings report. There have also been allegations that at least one contestant may have picked thinly traded stocks and that had friends or family buy the shares, which is a classic way of manipulating stock prices upward. Those are the theories anyway. None of the contestants who’ve been accused on cheating online would comment for this story or even return phone calls. If it strains credulity that people might cheat over what is supposed to be a game, Jim Kraber says it shouldn’t.

Mr. KRABER: It’s a million-dollar prize. I mean it’s not a game, something you would, you know, play in your home where there’s no winnings. There’s real money at the end of it.

ZARROLI: CNBC says it’s investigating the allegations and won’t comment until it’s done. The network has promised to announce a winner by July 8th.

Jim Zarroli, NPR News, New York.

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