SEC cracks down on market abuse

Daily news headlines

NEW YORK – The Securities and Exchange Commission (SEC) has responded to pressure to launch a probe into market abuse rumours. The US regulator has decided to look into false rumours in the market after investment bank Lehman Brothers and government-sponsored lenders Freddie Mac and Fannie Mae saw their share prices tumble over the past week amid takeover or bail-out rumours.

At the end of last week, the SEC reportedly called on several hedge funds to warn that subpoenas for their trading records with Lehman were imminent, and for hedge fund advisers to provide trading records together with other information such as email records.

SEC chairman Christopher Cox said his agency would join fellow regulators at the Financial Industry Regulatory Authority and the New York Stock Exchange in the examination of compliance, oversight and training standards with regard to information-sharing at hedge funds and brokerages.

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