BANGKOK -- Thai police arrested two people on suspicion of using the Internet to spread rumors about the health of the country's 81-year-old king that sent stock prices tumbling last month.

The two -- both of whom have worked in the securities industry -- were charged Sunday with violating Thailand's Computer Crimes Act by "feeding untrue information through a computer system which undermined the security of the nation," a Thai police spokesman said.

Thailand's Stock Exchange Index fell a combined 7.2% on October 14 and 15 as rumors circulated about the health of King Bhumibol Adulyadej, the world's longest-serving monarch. He had been admitted to the hospital with pneumonia-like symptoms and is still there. Authorities have said his health is improving.

Teeranu Wipuchanin, a 43-year-old former stock trader, was arrested at Bangkok's international airport after returning from a trip overseas. She told reporters after her arrest that she translated an article from financial news and data provider Bloomberg LP, which attributed the market's decline to rumors about the king's health, and posted it online. "Everybody on that day wanted to know what caused the market to fall," Ms. Teeranu said. A spokeswoman at Bloomberg's corporate headquarters in New York didn't immediately respond to a request for comment on Sunday.

Police also arrested Bangkok-based stock broker Kata Pajajariyapong, who couldn't be reached for comment. Both were charged under Thailand's computer-crimes law and face up to five years in prison and a $3,000 fine each if convicted.

Thailand in recent years has increased the range of laws used to dissuade discussions of the monarchy that officials say could affect the stability of the country. The royal family is a sensitive topic in Thailand because of the way King Bhumibol has helped unify the country in the face of several political upheavals during his 61-year reign. In addition to strict lèse majesté laws, which prohibit criticism of the king and his family, Thailand last year began prosecuting people under its 2007 Computer Crimes Act for using the Internet to discuss royal affairs.

Government spokesman Panitan Wattanayagorn has previously said the computer crimes law is designed to protect people from fraud and defamation as online commerce in the country develops, but that the law is also used at times to address what he describes as "national security" concerns.

In June last year, a Thai man named Suwicha Thakor was sentenced to 10 years in prison after pleading guilty to posting videos mocking the monarchy, while in August police arrested two people for emailed audio clips of Prime Minister Abhisit Vejjajiva purportedly ordering soldiers to attack antigovernment protesters. Mr. Abhisit said the recording was faked.

King Bhumibol has at times encouraged the growth of the democracy in Thailand, while at others has sanctioned military takeovers. Many Thais dread to contemplate what Thailand would be like without King Bhumibol, whom some here regard as almost divine. Political analysts say his son, 57-year-old Crown Prince Maha Vajiralongkorn, hasn't yet acquired the same stature and moral authority of his father.

Thai police said last week they may charge four or five people suspected of spreading rumors about the king. Thailand's Securities and Exchange Commission, meanwhile, is conducting its own investigation of the large market fluctuations in October and has said it is seeking information on two accounts held at Credit Suisse in Hong Kong and UBS in Singapore in connection with that investigation. Neither firm has commented on the case.

BANGKOK, Nov 5 — The arrests of three people accused of spreading rumours about the health of Thailand’s revered King, sparking a stock market plunge as a result, has raised eyebrows and sent jitters through the media.

The trio were arrested under Thailand’s draconian Computer Crimes Act, and more arrests are expected.

A statement on Monday by Tharit Pengdit, director-general of Thailand’s Department of Special Investigation (DSI), suggested that the net could be cast wider in a probe of what he called a coordinated effort — involving “persons, juristic persons, local news agencies and foreign news agencies” — to attack the stock market.

Thai stocks plunged 7.2 per cent on Oct 14 and 15 as rumours circulated over the health of King Bhumibol Adulyadej, who had been in hospital since Sept 19.

Daily statements had reported that his health was improving, but Thais are jittery about his frail health and advancing age. He celebrates his 82nd birthday next month. The King is Thailand’s ultimate moral authority, and is seen as the last resort at times of severe national crises.

In a report yesterday in the Post Today, a Thai-language business newspaper, the DSI said it was looking at charging a news agency in Hong Kong over the reporting of the stock market fall — an obvious reference to Bloomberg Business News. Its bureau in Hong Kong was the first to report the stock market sell-off on Oct 14.

The report came out at 3.38pm Thai time after the local bourse had already fallen for several hours.

On Sunday, Thai nationals Thiranan Vipuchanan and Katha Pajajiriyapong, both former brokers, were arrested under the Act on suspicion of passing on false information that could “threaten national security or cause public panic”.

Thiranan’s arrest, however, has left some critics baffled because she filed a posting on website Prachatai.com after the first Bloomberg report had appeared — and after the market had closed. The post was a translation of the Bloomberg report.

Prachatai.com is an independent site but, under Thailand’s current polarised political climate, is considered pro-Thaksin Shinawatra, the ousted former prime minister, among the ruling elite. Chiranuch Premchaiyaporn, director and Web moderator of Prachatai.com, herself has been charged under the Act, which came into force in June 2007.

Katha posted his comment on the website of Fah Diew Kan, a leftist journal. The daily Thai Rath yesterday quoted Minister for Information Technology Ranongrak Suwanchawee as saying that Katha posted “inauspicious” content on several websites and forwarded it to friends.

At least two of them forwarded the message to others. Those two would also be charged, the minister said, adding that the Internet service providers (ISPs) of Prachatai.com and the Fah Diew Kan website could be shut down if they continued to host sites that threatened national security.

A third person accused of spreading rumours about the health of the King was arrested on Tuesday. Somjet Sitthiworakul is reportedly a small-time snooker hall owner.

All three have been granted bail.

In an editorial on Tuesday, the Bangkok Post said the arrests were troubling.

“The Computer Crimes Act, denounced when it was passed under the military regime, has turned out much like its critics feared — being used as a catch-all law to stifle criticism and to intimidate the media,” it said.

“The Bloomberg report did not speculate about the King’s health. It reported the fact, as did hundreds of news outlets, that a sell-off at the SET (Stock Exchange of Thailand) was the result of ill-intentioned rumours.”

The daily added: “A vital and urgent question is whether Thiranan and Katha are scapegoats. On the evidence released by police, the two neither started nor profited from the rumour.”

Supinya Klangnarong, a board member of the Thai Netizens Network, told The Straits Times: “The Act’s intent was to combat online crime (but) it is being used for political purposes.”

BANGKOK, THALLAND - When Thailand's stock market swooned last month, analysts put the blame on widespread rumors over the deteriorating health of the country's revered monarch, who had been hospitalized with the flu. The next day, Oct. 15, brought more rumors and an even sharper sell-off, capping a two-day 7 percent drop in the benchmark stock index.

Now Thai authorities are targeting citizens they allege spread rumors about the king's health in order to profit from the selloff.

Over the past week, Thai authorities have arrested three people on charges of disseminating false data. Police say that further arrests may follow and government officials warn that "national security" is at stake in the case.

The arrests have sparked complaints of a witch-hunt by arch-royalists using the sensitive issue of the monarchy to suppress free speech. Two of the suspects, who are former stock-market analysts, have been charged under a controversial and wide-ranging computer crimes law.

The case has highlighted deep-seated fears among Thais over the eventual passing of King Bhumibol Adulyadej, the world's longest-reigning monarch, who turns 82 in December. He is still in the hospital after being admitted on Sept. 19.

Prime Minister Abhisit Vejjajiva told Reuters on Saturday that the king had recovered from his illness and would soon be discharged from hospital, in line with the advice of doctors.

In a bid to calm the nation's nerves, King Bhumibol has made several public appearances at the hospital, including one after the stock market selloff. On Nov. 2, he was shown on TV taking part in a Thai holiday ritual of setting a candlelit float on water.

MONARCHY AND POLITICS INTERTWINED

As a constitutional monarch, Bhumibol is said to be above politics. But the symbolic power and status of the monarchy has long been a crucial element in a political system that runs on personal networks and patronage.

The monarchy is deeply revered in Thailand and though it has limited powers, it has served as the crucial guarantor of national unity. King Bhumibol's positions on Thailand's political upheaval over the years (the country has had ten coups since 1971) have often proved decisive, ensuring generally peaceful transfers of power even when carried out by extra-constitutional means.

Many Thais fear that Crown Prince Maha Vajiralongkorn, the king's designated successor, lacks his father's stature and could usher in a period of protracted political instability.

For Thais, the monarchy has been an axis around which a half-century of socioeconomic transformation has turned, says Michael Montesano, a Thai scholar in Singapore.

"Soon … they are going to need to work harder to resolve social, economic, and political problems. And the possibility of failure leaves many (Thais) deeply pessimistic," he says.

The debate over succession is largely conducted in private for fear of breaking strict lese-majeste laws, the use of which has spiked in recent years. The computer-crimes law has been used to prosecute internet users over royal slurs, including an engineer sentenced in April to 10 years in prison for posting anti-monarchy videos on YouTube.

Stock market sensitive to rumors about monarch

In this climate, rumors like those that roiled the stock market spread fast, says Chiranuch Premchaiporn, who runs Prachatai, a left-leaning news website.

"In a society with a lack of democracy and platforms for free expression and a right to access information, this is the way that people react," she says.

Thiranant Wipuchanin, one of the suspects arrested last week, had posted a translation of a Bloomberg News report on October 14 about the stock markets decline on concerns about the king's health.

The translation went up after the market had already closed so could not have effected stock prices, says Ms. Chiranuch.

The chairman of the Stock Exchange of Thailand (SET) said Ms. Thiranant, a former securities company director, hadn't been trading, according to the Bangkok Post.

The other suspect detained on the same day reportedly posted a similar item and commentary on "Same Sky Books," another left-leaning website. The SET said it was reviewing his investment accounts.

Observers have questioned why the police have zeroed in on the two websites, both of which have already been investigated over alleged online royal slurs and have been accused by government officials of subversion.

"They're going willy-nilly at it, without seeming to have much of a case," says a Western diplomat.

As webmaster of Prachatai, Chiranuch was charged earlier this year under the computer-crimes act for failing to delete postings. She denies the charges.

Thailand's stock-market regulator is separately investigating transactions placed via two European brokerages in Hong Kong. In Thailand, as in many jurisdictions, it's illegal to knowingly spread rumors to make a profit in the stock market.

FORMER PRIME MINISTER'S ALLIES TURN UP HEAT

Government officials have said that the rumors over the king's health may have been politically motivated. This is seen as a dig at former Prime Minister Thaksin Shinawatra, who was ousted in 2006 by the military and is living in exile in Dubai.

In recent weeks his allies have turned up the heat on Mr. Abhisit's government. Cambodia's Prime Minister Hun Sen has appointed Mr. Thaksin as an economic adviser, infuriating the Thai government, and both countries have withdrawn their ambassadors in a tit-for-tat row.

Securities analysts say the uproar over the royal rumors sends a chilling signal to investors. Some argue that the drop in Thai shares may have been driven by profit-taking in a bull market as much as concerns over the king's health. Indeed, the following week saw other Asian markets give up some of their gains, just as Thailand's had.

"Arresting analysts for doing their jobs is probably not the best way to attract foreign capital," says a securities analyst in Hong Kong.