- White House Plans to Freeze Spending to Cut Deficit
- Week Ahead: Investors Go for Quality, Assess Recovery
- Hedge Fund Billionaire Paulson Reports New Citi Stake
- Cramer: 5 Earnings Reports to Watch Next Week
- Court Rejects 'Clawbacks' for Alleged Stanford Victims
- Cities With the Most Home Price Reductions
- Tax Credit Sparking First-Time Home Sales: Realtors
- Investors Cut Back US Stocks for Bigger Growth Abroad
- This Year's Biggest Thanksgiving Leftover: Cash
- U.S. Stocks Rally for the Second Straight Week
- Dollar is Not Plunging—So 'Calm Down': Market Strategist
- Strategists Say Markets Have More Upside — But How Much?
- Hirschhorn: Risk-Averse Traders
- Roginsky: A Funny Thing Happened on the Way to Financial Reform
- This Year's Biggest Thanksgiving Leftover: Cash
- TV Series Inks Unique Deal For Fight
- First Time Buyers Rescue Housing: Realtors
- Dollar General Trades Higher After Its IPO
MOST SHARED
- CNBC Video: Warren Buffett & Bill Gates - Keeping American Great
- Today's Market Action
- Has Twitter's Finest Hours (Seconds) Come and Gone?
- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- CNBC TRANSCRIPT: Warren Buffett & Bill Gates - Keeping America Great
- China's Role as Lender Alters Dynamics for United States
- Israel Going Green
- Inside Wal-Mart's Acai Berry Juice Maker
- Low Interest Rate Investing
Text Size 
The SEC, under heavy pressure for not responding more forcefully to a raft of rumors that have pounded stock prices of companies such as Lehman Brothers, announced that it will investigate rumor-mongering and stock price manipulation on Wall Street.
The need for such a move by the SEC took on new urgency after a turbulent week in the U.S. stock market, where major financial firms such as Lehman Brothers [LEH
Loading...
()
], Fannie Mae [FNM
Loading...
()
] and Freddie Mac [FRE
Loading...
()
] were battered by rumors about everything from government bailouts to possible mergers.
"I think there should be criminal prosecution at a high level because that’s the only thing that stops those people," said Jon Najarian, co-founder of Optionmonster.com. "Otherwise they just pay a fine and move on." (See the accompanying video for more.)
"People hear rumors at cocktail parties, but there’s really something sinister going on today, particularly with the banks spreading rumors that customers are stopping doing business with Lehman Brothers. That has a tremendous effect on the market," he said.
"In this market, any kind of rumor is being taken seriously," said Jake Zamansky, a lawyer at Zamansky & Associates Securities. "People spreading these rumors, in many cases have driven out the likes of [Bear Stearns] and potentially Lehman Brothers. People spread false information, outright lies, to drive these companies down."
Meanwhile, executives at Lehman Brothers, whose shares fell nearly 17 percent Friday alone, are working on a plan to put the firm on more solid footing and stop the free-fall in the company's stock.
“I think it’s incumbent upon the SEC to get the people those false rumors and, companies should come up and ask for proof. If they don’t have the proof, these people should be prosecuted,” added Zamansky.
Print
Email
- Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
- For the chief of cable company Comcast, growth has been about making deals – generally very large deals.
- Some companies may start using insurance to shift carbon risk from their balance sheets to maybe... yours?
- The president and founder of Genesis Today wants to improve America’s health, and thinks Wal-Mart can help.
- Switzerland's privacy watchdog is taking legal action to force Google to make changes to its Street View service.
- A wealthy, distracted Texas driver crashed his million-dollar Bugatti Veyron sports car into a salt marsh, say police.
Data is a real-time snapshot *Data is delayed at least 15 minutes