SEC Orders Hedge Funds to Disclose Trading Information (Now We’re Getting Somewhere!)

Manipulation of Stock Prices by Hedge Funds? 

According to a story reported by the Wall Street Journal yesterday, the Securities and Exchange Commission has ordered two dozen hedge funds to turn over stock trading records.  Apparently, the SEC is concerned that these hedge funds were manipulating the stock prices in six financial services companies (Goldman, Lehman, WaMu, AIG, Morgan Stanley, and Merrill Lynch).  More specifically, the investigation will focus on whether these hedge funds spread false rumors about the companies’ health so as to drive their stock prices down.  This would allow the hedge funds to make huge profits by selling the stocks short. Read more