04/05/2008 05:12 am ET Updated May 25, 2011

SEC Investigating Trading In Lehman Brothers Stock

U.S. regulators are investigating whether traders spread false rumors about Lehman Brothers Holdings Inc.'s financial soundness to profit from a drop in the company's share price, two people familiar with the probe said.

The Securities and Exchange Commission has expanded an inquiry into whether investors including hedge funds tried to manipulate Bear Stearns Cos. stock to also review a decline in Lehman's shares, said the people, who declined to be identified because the inquiry isn't public. The Lehman probe examines short sales of the company's stock, one of the people said.

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