Let's see if we have this right. It seems the SEC is investigating the market manipulating stories in Reuters and the New York Times about Fannie and Freddie. Oh, no. That's totally wrong. Actually, the SEC is investigating the rumors about the collapse of Bear Stearns, which were somehow "misleading" despite the actual collapse of Bear Stearns.
Wall Street's biggest regulators are examining whether securities firms adequately police rumor-mongering used to manipulate stocks after shares of Lehman Brothers Holdings Inc., Fannie Mae and Freddie Mac tumbled last week.
The U.S. Securities and Exchange Commission's inspections unit, the Financial Industry Regulatory Authority, which monitors brokerages, and the New York Stock Exchange's regulatory arm are checking whether firms have controls in place to prevent the intentional spread of misinformation, the SEC said in a statement today. They will also look at whether employees have been adequately trained.