The Four Rumors: SEC's Subpoenas Focus On Lehman Rumors

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The SEC's inquiry into rumor-mongering on Wall Street is focusing on four different rumors about Lehman Brothers, according to the Wall Street Journal. Each of the rumors allegedly helped push down shares, and each has been denied by those named in it. Here are the four rumors:
Falling back on the Federal Reserve: In early June, there were whispers that Lehman had been forced to go to the Federal Reserve's special broker-dealer discount window to borrow money to preserve liquidity. Lehman denied the rumors.
The Barclays Take-Under: A couple of weeks later, the rumor circulated that someone--maybe Barclays--was going to buy Lehman in a "take-under," scooping up the firm for less than it's market cap. Lehman didn't respond to this rumor. Neither did Barclays. It hasn't happened (yet).
PIMCO is pulling its business out of Lehman: This rumor was quashed quickly, with Pimco's Bill Gross taking to CNBC to deny it. Still, Lehman's decline dropped precipitously and many remain skeptical about the denials. "Are you telling me that Pimco isn't reducing its exposure to Lehman counter-party risk?" one market watcher remarked to DealBreaker, his voice heavy with skepticism. Gross's denial was hardly reassuring about Lehman's health--he said Pimco wasn't pulling out because it was confident that the Fed would keep Lehman afloat. Moral hazard as a business strategy.
SAC Capital is pulling its business out of Lehman: This was the same thing as the Pimco rumor. Quickly arose and was quickly denied. The best part about this was that the rumor actually elicited a statement from the usually secretive SAC Capital. That's a clear sign of fear in the markets, when the mouth piece for Stevie Cohen actually starts saying things.

Agency Subpoenas Focus on 4 Rumors That Hit Lehman
[Wall Street Journal]

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