Prosecutors are investigating employees of Wall Street banks, including Bear Stearns Cos.
Three people have taken pleas in exchange for cooperation with prosecutors in Brooklyn, New York, who have conducted the nearly 18-month-long probe, Business Week magazine said on its Web site, citing unnamed sources. The scheme may have cost financial firms and short sellers millions of dollars in unnecessary fees, the magazine said.
Current and former employees at the stock loan desks of Bear and Morgan Stanley are drawing the most scrutiny, the magazine said, citing unnamed sources. Also under investigation are current and former employees of Goldman Sachs Group Inc.