Lehman Brothers CEO Richard Fuld has instructed his legal staff to tell regulators that he has information suggesting that short-selling hedge funds colluded to help cause the demise of Wall Street investment bank giant Bear Stearns, sources told CNBC.
The information Fuld told his staff he has comes just two weeks after the collapse of Bear Stearns and its subsequent purchase by JPMorgan Chase .
It was widely believed that Lehman Brothers was the next target of short-sellers who were speculating that the investment banks were facing liquidity crises and were about to become insolvent.
Bear Stearns fell after a crisis of confidence caused by rumors of the liquidity crisis. Fuld's efforts to alert the Securities Exchange Commission about the possible short-selling plot could be an attempt to ward off a future effort against his firm.
Lehman Brothers said it had no comment on the matter, and SEC officials did not return a request for comment.