WASHINGTON (Thomson Financial) - The U.S. Securities and Exchange Commission announced Sunday it would 'immediately' launch a probe to prevent the spread of false information used to manipulate securities prices.
'The SEC and other securities regulators will immediately conduct examinations aimed at the prevention of the intentional spread of false information intended to manipulate securities prices,' it said.
The SEC, along with the Financial Industry Regulatory Authority and New York Stock Exchange Regulation Inc., will examine the controls put in place by the brokerage firms and financial advisers to prevent such manipulations.
'The examinations we are undertaking with FINRA and NYSE Regulation are aimed at ensuring that investors continue to get reliable, accurate information about public companies in the marketplace,' said SEC Chairman Christopher Cox.
'They will also provide an opportunity to double-check that broker-dealers and investment advisers have appropriate training for their employees and sturdy controls in place to prevent intentionally false information from harming investors,' Cox said in a statement.
The SEC gave no details about its examinations, but the announcement came two days after the shares of US mortgage finance giants Fannie Mae and Freddie Mac nose-dived before rebounding. It is also rare for the commission to publicly announce inquiries.
The SEC has been investigating for months the dissemination of false Wall Street information similar to those that led to the near-bankruptcy of U.S. investment bank Bear Stearns in March.
The commission said Sunday its examinations 'are in addition to the Commission's enforcement investigations into alleged intentional manipulation of securities prices through rumor-mongering and abusive short selling that are already underway.' tf.TFN-Europe_newsdesk@thomson.com afp/ak COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.