Home › Business › Business
SEC investigating spread of false information
STORY TOOLS 
More from BusinessWASHINGTON — The Securities and Exchange Commission said Sunday that it is immediately opening a probe to prevent the spread of false information used to manipulate securities prices.
SEC Chairman Christopher Cox said the investigation is aimed at "ensuring that investors continue to get reliable, accurate information about public companies in the marketplace."
The probe comes amid a new bout of turmoil that has gripped investors. Questions have been swirling about the financial health of mortgage giants Fannie Mae and Freddie Mac as well as Lehman Brothers Holdings Inc.
Earlier this year, a run on Bear Stearns pushed the investment bank to the brink of bankruptcy and into a takeover by JPMorgan Chase. Bear officials blamed market rumors for the run.
The investigation will be conducted by the SEC's Office of Compliance Inspections and Examinations as well as the Financial Industry Regulatory Authority and New York Stock Exchange Regulation Inc.
Cox said the probe will provide an opportunity to make sure that brokers and investment advisers have "appropriate training for their employees and sturdy controls in place to prevent intentionally false information from harming investors."
By law, brokers and investment advisers must have procedures in place to prevent market manipulation and other violations. Investigators will focus on such controls and whether "they are reasonably designed to prevent the intentional creation or spreading of false information intended to affect securities prices or other potentially manipulative conduct," the agency said.
The probe is separate from SEC's investigations, already under way, into alleged intentional manipulation of securities prices through "rumor-mongering and abusive short selling," the agency said in a statement.
Posted by jeff93024 on July 14, 2008 at 8:54 a.m. (Suggest removal)
This needless investigation will be a terrible blow to the free market.
Wonderfully creative quasi-truthisms like the ones that almost took down Bear Stearns are what help to make the market vibrant, exciting, and incredibly lucrative for adventurous investors and the most accomplished business captains of today and tomorrow. Carefully bred and disseminated seeds of demi-factualism honor the best traditions of the American advertising industry, and they need to be allowed to grow and bloom whenever and wherever possible.
Enough regulation! Save the Free Market Now! We have an entire generation of high school and college students who figured out how to cheat their way through all of their exams who are depending upon a marketplace that knows no regulation!
(Requires free registration.)
Article discussions on this site are to support community debates of issues related to our stories and editorials.
Discussions should not stray from the subject of the story or editorial.
We do not allow the following:
We reserve the right to delete threads and/or ban users for these or other reasons we deem necessary.
Opinions are the sole responsibility of the person posting them. You agree not to post comments that are off topic, defamatory, obscene, abusive, threatening or an invasion of privacy. Violators may be banned. Click here for our full user agreement.