A false report from a "citizen journalist" about Steve Jobs' health sparked concern from investors, driving Apple's stock down three percent in a full day — hitting a 17-month low of $94.65.

The stock later recovered, but the debacle raised questions about the possible negative impact of falsely-reported "crowdsourced" news.

The post was made on iReport, a user-generated content site run by Time Warner's CNN. It claimed CEO Steve Jobs "was rushed to the ER just a few hours ago after suffering a major heart attack." Within 10 minutes of the posting, the web buzzed with questions about the report and Apple's stock fell 10 percent, recovering to close at a three percent down.

Then came the denials: Apple issued a statement that the report was false, and CNN removed the article from iReport. (See a full rundown of the day's events on Silicon Alley Insider.)

Jeff Jarvis weighed in (via CNNMoney.com): "It's a mistake to say this indicates some type of larger problem. People start rumors on Wall Street all the time. Anyone with any sanity would have said 'I'm going to check that out', not 'I'm going to sell all my stock'."

A similiar stock crisis struck United Airlines last month when a news report of its 2002 bankruptcy filing surfaced on Google News as a current event. Shares dipped to $3 apiece from $12 - though they later rebounded when the mistake was revealed.

No one quite knew who to blame. In the case of the rumor about Jobs, however, CNN's Terms of Use makes it clear that the company is not responsible for the statements made across user-generated content or in coverage on iReport.com.

Even with such safeguards of liability, it's hard for major media outlets to move into citizen journalism, Wikipedia founder Jimmy Wales told The Globe and Mail. Errors are more readily believed on CNN, for example, than they would be from a grassroots citizen journalism site.

But as far as CNN's concerned, its duty to the people is fulfilled. Once "the community brought it to our attention," CNN said, "the fraudulent content was removed from the site and the user's account was disabled."

Jarvis urged mainstream media to not "let one bad apple besmirch the entire orchard [of citizen journalism]" and to continue supporting crowdsourced news on their sites.

Major brands, including Wired, The New York Times and Fast Company have made room for user-generated content, but content moderation has become a major issue. Last week CBS discovered a "citizen journalist" posted prurient images on its EyeMobile site.