The SEC has taken its concern about rumormongering to a new level: now it’s calling the subjects of rumours to find out if they’re true:
WSJ: In an apparent attempt to prevent a repeat of the cascading rumours that helped sink Bear Stearns Cos., the Federal Reserve last month quietly called one major bank to see if it had pulled a credit line from Lehman Brothers Holdings Inc., people familiar with the matter said.
Responding to a July rumour that Credit Suisse Group planned to pull a line of credit to Lehman, Federal Reserve officials called to see if it was in fact true, according to these people. Credit Suisse told Fed officials there was no truth to the rumour and it had no intention of pulling the line of credit, the people said…
In addition to pounding its bottom line, Lehman has complained that its problems have been fodder for vicious, unfounded rumormongering by traders who profit when the firm’s share price declines.
Lehman has repeatedly denounced negative speculation, even calling individuals believed to be spreading rumours and trading desks said to be skittish about doing business with the investment bank.
And what would they have done if the rumour was true?
See Also: SEC rumour Sting: Demands Scandalous Hedge Fund Emails
Lehman Sick Of Stock Plummeting Every Day, May Go Private
Lehman Brothers Debacle May Lead To Massive Firings
Jamie Dimon Goes Insane: “People Who Pass On rumours Should Go To Jail”*
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