preview.tinyurl.com/6m9suj -> www.nytimes.com/2008/07/14/business/14sec.html?ref=business
JENNY ANDERSON Published: July 14, 2008 The Securities and Exchange Commission announced on Sunday that it and other regulators would begin examining rumor-spreading intended to manipulate securities prices.
Analysts Say More Banks Will Fail (July 14, 2008) The timing of the announcement, made before the markets opened in Asia, was meant to warn broker-dealers, hedge funds and investment advisers to quell any spreading of rumors before trading started Monday. The SEC has been engaged in an internal debate over what kind of investigation to mount with respect to rumors.
Freddie Mac, sped the decision to begin the examination and make it public. They need to think twice if they are going to pass it on," said Lori Richards, director of the SEC's Office of Compliance Inspections and Examinations. "It's important that firms be aware of their supervisory and compliance obligations to prevent violations of the securities law," Ms Richards said. "It's like robbery is always illegal and the police are now going to be doing extra patrols up and down the streets of our neighborhood," said a Columbia Business School professor, David O Beim. The examinations are expected to begin Monday and will focus on what policies firms have in place to prevent the passing of false information. The intent is to stop malicious rumors without hampering the natural exchange of information in the marketplace.
Bear Stearns earlier this year, top-level Wall Street executives have been pleading with regulators to investigate what they see as efforts by short sellers to plant false information and profit from it.
Lehman Brothers, for example, faced rumors last week that two major clients had stopped doing business with the firm. Lehman's stock dived almost 20 percent before recovering somewhat as both clients denied the rumors. The issue is a notoriously challenging one for the SEC Rumors have long been a part of Wall Street's fabric, and to prove rumor-mongering is a difficult task, especially with 24-hour news and communications technology like instant messaging and text messaging. But Wall Street executives insist that false information is permeating the marketplace as never before. Since Wall Street firms are highly leveraged businesses that need outside financing, confidence is crucial, and rumors can overshadow the strength of their businesses, executives say. Short sellers deny that they plant false information and argue that Wall Street is as vulnerable as it is because it invested in risky businesses that backfired. These examinations will focus on compliance and supervisory policies. In addition, continuing investigations will look at potential wrongdoing. In April, the SEC settled a securities-fraud and market-manipulation charge against Paul S Berliner, a trader formerly with the Schottenfeld Group.
|
http://csua.com/feed/