US securities regulators are boosting efforts to stop the spread of false rumors that threaten financial institutions, after a week that saw steep slides in the shares of Fannie Mae, Freddie Mac and Lehman Brothers, Reuters reports.
In an unusual weekend statement, the US Securities and Exchange Commission warned on Sunday that regulators would immediately examine whether broker-dealers and investment advisers have controls in place to prevent market manipulation.
Examiners from the SEC, New York Stock Exchange Regulation and the broker-dealer watchdog, the Financial Industry Regulatory Authority, will see if the controls are designed to prevent the intentional creation or spreading of false information.
Securities officials say the timing of the announcement was aimed at getting word of the crackdown out before Asian markets open on Monday, the first to trade globally.
“It’s to prevent rumors that threaten commercial banks, investment banks and government-sponsored enterprises (Fannie Mae, Freddie Mac)” says one securities official on condition he was not named.
The full story is available at the Reuterss web-site.