I really had a good, approximate 5 minute laugh when I saw this headline and read the article. Hope you all enjoy as much as I did, because this is some damn funny shit. You see, they want to shut down the very essence of what creates buyers and sellers - thus making a market; information (whether true or false). They should begin their 'serious' inquiry with members of the Federal Reserve, Department of Treasury, and Executive Branch.... Guys and girls, it just doesn't GET any more hilarious than this. Good luck, oh thy noble SEC! S.E.C. Warns Wall Street: Stop Spreading the False Rumors By STEPHANIE CLIFFORD and JENNY ANDERSON Published: July 14, 2008 http://www.nytimes.com/2008/07/14/business/14sec.html The Securities and Exchange Commission announced on Sunday that it and other regulators would begin examining rumor-spreading intended to manipulate securities prices. The timing of the announcement, made before the markets opened in Asia, was meant to warn broker-dealers, hedge funds and investment advisers to quell any spreading of rumors before trading started Monday. The S.E.C. has been engaged in an internal debate over what kind of investigation to mount with respect to rumors. The turbulence in the markets last week, with rumors adding to concerns about fundamentals affecting commercial banks, investment banks and the government-sponsored enterprises Fannie Mae and Freddie Mac, sped the decision to begin the examination and make it public. âTraders know there is false information in the market. They need to think twice if they are going to pass it on,â said Lori Richards, director of the S.E.C.âs Office of Compliance Inspections and Examinations. âItâs important that firms be aware of their supervisory and compliance obligations to prevent violations of the securities law,â Ms. Richards said. âItâs like robbery is always illegal and the police are now going to be doing extra patrols up and down the streets of our neighborhood,â said a Columbia Business School professor, David O. Beim. The examinations are expected to begin Monday and will focus on what policies firms have in place to prevent the passing of false information. The intent is to stop malicious rumors without hampering the natural exchange of information in the marketplace. Since the almost overnight collapse of Bear Stearns earlier this year, top-level Wall Street executives have been pleading with regulators to investigate what they see as efforts by short sellers to plant false information and profit from it. Lehman Brothers, for example, faced rumors last week that two major clients had stopped doing business with the firm. Lehmanâs stock dived almost 20 percent before recovering somewhat as both clients denied the rumors. The issue is a notoriously challenging one for the S.E.C. Rumors have long been a part of Wall Streetâs fabric, and to prove rumor-mongering is a difficult task, especially with 24-hour news and communications technology like instant messaging and text messaging. But Wall Street executives insist that false information is permeating the marketplace as never before. Since Wall Street firms are highly leveraged businesses that need outside financing, confidence is crucial, and rumors can overshadow the strength of their businesses, executives say. Short sellers deny that they plant false information and argue that Wall Street is as vulnerable as it is because it invested in risky businesses that backfired. These examinations will focus on compliance and supervisory policies. In addition, continuing investigations will look at potential wrongdoing. In April, the S.E.C. settled a securities-fraud and market-manipulation charge against Paul S. Berliner, a trader formerly with the Schottenfeld Group. The S.E.C. charged he had spread a false rumor about the price of the Blackstone Groupâs potential acquisition of Alliance Data Systems, and profited from short-selling Allianceâs stock. In addition to the S.E.C., the Financial Industry Regulatory Authority and New York Stock Exchange Regulation will be conducting the examinations.
Is George W. Bush's, Ben Bernanke's and Hank Paulson's 'we support a strong U.S. dollar' statement subject to this crackdown?
If rumors are are a self-fulfulling prophecy variety ie bear stearns: does that make it a false-rumor, a true-rumor, or a rumor that's possibly true turned into definitely true at a later time? How long do you wait before declaring a rumor true or false? What if you spread a rumor that you honestly believe to be true at a certain point in time?
+1 How the hell are they going to enforce a 'you can't spread false rumor' policy? It's laughable to even think that they would try to (and even more laughable to think that they can).
Do public companies have an obligation to tell the market when there are baseless rumors driving up their stock prices? Although, most will make announcements when their shares are falling without reason.
I wish upon you that someone should spread a rumor about you and it causes you great pain and suffering. Then we won't have to listen to your idiocy.