SEC Subpoenas More Than 50 Hedge Funds In Rumor Probe

Jul 15 2008 | 10:08am ET

Some of the biggest names in the hedge fund industry have been subpoenaed as part of the Securities and Exchange Commission’s probe into rumor-mongering on Wall Street.

Citadel Investment Group and SAC Capital Advisors are among the more than 50 hedge fund management firms sent subpoenas within the past few weeks, The Wall Street Journal reports. The SEC is trying to determine whether individuals spread rumors to manipulate the price of Bear Stearns and Lehman Brothers shares, asking the hedge funds for trading communications data about short-selling and options trading in one or both firms.

The firms hit with subpoenas have been told that they are not necessarily the focus of specific allegations, the Journal says.

Some of the subpoenas were received as recently as yesterday, while some firms subpoenaed earlier have already produced information for the regulator. The information sought includes that related to securities trading by brokers and correspondence between hedge funds and other parties.

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