The U.S. Securities and Exchange Commission (SEC) has sent subpoenas to more than 50 hedge-fund advisers as it investigates whether individuals spread false rumors to manipulate shares in two Wall Street firms, The Wall Street Journal said, citing a person familiar with the matter.
The subpoenas, sent as recently as Monday, are seeking trading and communications data related to short-selling and options trading in Bear Stearns or Lehman Brothers , the person told the paper.
Rumours have been blamed for the collapse of investment bank Bear Stearns and for the 40 percent slide in Lehman shares this month.
Some of the hedge-fund advisers have received subpoenas related to both probes, while others were contacted with respect to only one.
Among the firms that have received subpoenas are Citadel Investment Group LLC in Chicago and SAC Capital Advisors in Stamford, Connecticut, the paper said.
The subpoenas relate to trading in securities of the brokers, as well as correspondence between the hedge funds and other parties, people familiar with the inquiry told the paper.
The subpoenas are part of a broad inquiry, and firms that have received subpoenas were told by the SEC that they are not necessarily the focus of specific allegations, the Journal said.
Some hedge funds received subpoenas Monday. Other subpoenas were sent within the past few weeks, and several firms have turned over information to the SEC already.
The probe is still in its early stages, the paper said, citing people familiar with the matter.
Separately, NYSE Regulation, the regulatory unit of stock-exchange parent NYSE Euronext , sent a letter Monday to a number of its "largest member firms" requesting details on how those securities firms monitor compliance with rules prohibiting circulation of false and misleading rumours that could roil stock prices, the paper said.
The letter said the review was being conducted jointly with the Financial Industry Regulatory Authority, a Wall Street self-regulatory agency.
The securities firms that received Monday's letter were given a July 28 deadline to provide the information, including any disciplinary actions taken against employees linked to false or misleading rumours, the paper said.
Citadel Investment, SAC Capital and the SEC could not be immediately reached for comment.