Of course, it wasn't true. But what I couldn't quite get my head around, once I started looking into it, was why anyone would believe it to begin with.

Not so oddly enough, my first reaction to postulate that the story could in fact be true. (The attraction of any juicy rumor, of course.) Jobs has already faced down pancreatic cancer. It's somewhat possible that the "reporter" was an internist in a local hospital. And Jobs is now a viable celebrity, and one that could be recognized by staff.

But what apparently fooled those that sold Apple's stock on the news was the tie-in to CNN, one of the most respected news organizations on the planet. On iReport, there is a mix of "stories," ranging from accounts of dealing with Down's syndrome to partisan rants about who won the debate. In other words, a spectrum traversing true journalism on to the type of babble you can find on any discussion forum on the Internet.

The trouble is that some stories are "blessed" by CNN and showcased on the site. But iReport, as a whole, polices itself: "iReport.com is an entirely user-generated site where the content is determined by the community," according to Silicon Valley Insider. "Content that does not comply with Community Guidelines will be removed. After the content in question was uploaded to iReport.com, the community brought it to our attention. Based on our Terms of Use that govern user behavior on iReport.com, the fraudulent content was removed from the site and the user's account was disabled."

At this point, one can't tell whether CNN blessed the post with the "CNN" tag that appears to give reports some credulity. But there's still never been any indication that "CNN"-tagged iReports have been vetted by CNN editors or fact-checkers. (EDIT: CNN apparently employs a moderation company but does not fact-check items, according to this San Francisco Chronicle report. And originally every story was vetted by CNN.)

At this point, the SEC is now investigating to determine the identity of the poster, apparently in an effort to prosecute him or her for manipulating Apple's share price.

Normally, however, rumors blow around Wall Street like hot-dog wrappers. Share prices move for a reason, and some of those "reasons" can range from speculation to flat-out untruths. But what "johntw" posted is really all not that different from the BS posted to any discussion board on the Web. Even though CNN's name appears on iReport.com, there's no reason to expect CNN-quality journalism across the site.

This isn't a failure of "citizen journalism". This is a failure of CNN, allowing its brand to be splashed onto a site where the reporting isn't held to a uniform, consistent standard. This is a failure of the SEC, which apparently sees itself as sort of a thin green line of order in a financial marketplace that is evolving into some sort of Mad Max scenario. (The ban on short sales of financial stocks is evidence of this.)

But the real blame lies with the people that read this and acted upon the news before it was verified and validated by a real news organization. Where was the Apple comment? The supporting details, such as the name of the hospital? For pete's sake, this was "johntw's" first story. Any canny forum denizen looks at the number of posts a particular author has to determine if he or she can be trusted. An "iReport" should be no different.