THE BLOG

New SEC Trading Probes Eye Goldman Sachs, Apple

10/31/2010 12:46 pm ET | Updated May 25, 2011

Goldman Sachs and Apple, two of the hottest companies in the stock market, have caught the eye of many investors, traders and momentum players. Ditto the eye of the Securities and Exchange Commission, which, I've learned, has recently kicked off trading investigations into the securities of both companies.

The shares of each have enjoyed blockbuster rebounds from their 2008 lows, the kind of increases investors dream about, with Goldman Sachs climbing from $47.41 to its current price of $153.63 and Apple ballooning from $79.14 to $195.11.

These two probes stand out among what appears to some Wall Street pros as an accelerated number of stock trading investigations undertaken by the commission, which has taken a lot of heat because of its inept handling of the Bernard Madoff scandal.

It could not be immediately determined if the two SEC investigations directly relate to any other developments involving the company, which conceivably could be the case.

As of now, they're just two of a rash of new stock trading inquiries--at least 34 of them--that the SEC has recently fired off to the brokerage community.

Among other companies whose stock trading is being investigated by the SEC are Northwest Airlines, Oracle Corp., Deutsche Bank, Lennar Corp., Centex Corp., Foot Locker, Pepsi Bottling Group, UnitedHealth Group, Barr Pharmaceuticals and XTO Energy.

This large batch of inquiries is said to reflect stepped-up efforts by securities industry regulators to crack down on the bad guys, notably those who may have illegally traded on inside or non-public information.

The SEC couldn't be reached for comment, with a voice-mail message out of its Washington office explaining the agency was closed for the day because of the snowstorm.

Frankly, I'm not sure I would have fared much better even if the commission was open for business. In the past, it has always been mum when it comes to probes, consistently observing "we don't comment on investigations."

In this instance, though, there's no question of the accuracy of the 34 investigations since a regulatory source confirmed them to me. Further, I have obtained copies of internal SEC documents which the agency sent to assorted brokerage firms in search of specific information and detail all the names of the companies that are mentioned here.

It is understood these investigations largely center on the trading in the securities, not on the companies themselves, but the latter cannot be ruled out.

In its queries to brokerages, the SEC requested the names of their clients both here and abroad who traded in the securities of the companies in question in specified time periods.

Aside from the companies mentioned earlier, the SEC is also investigating trading in the Wendys Arbys Group, Cell Therapeutics, Rome & Haas, Republic Services, Union Bankshares, Longs Drug Stores (which was acquired last October by CVS Caremark Corp. for $2.9 billion), Financial Fed Corp., Teppco Partners L.P. and Atlas Energy Resources.

Wrapping up the list are Alpha Natural Resources, Infinera Corp., Jackson Hewitt Tax Services, Usana Health Services, Calpine Corp., Altigen Communications, Neopharm, Quantum Fuel Systems Technologies, Cedar Fair L.P., Interstate Hotels & Resorts, FGX International Holdings, Maguire PPTYS and BPW Acquisition Corp.

Who says illegal trading is dead on Wall Street. Only the dead!

What do you think? E-mail me at DandorDan@aol.com