SEC Announces New Examinations Focusing On Stock Manipulation

The SEC took the unusual step yesterday of issuing a Sunday press release to announce that the agency will immediately begin conducting examinations aimed at preventing the "intentional spread of false information intended to manipulate securities prices." The SEC made this announcement at least partly in reaction to recent stock price declines experienced by several companies in the financial sector.

According to the release, the examinations will be conducted by OCIE (and simultaneously by the Financial Industry Regulatory Authority and New York Stock Exchange Regulation, Inc.) and will focus on supervisory and compliance controls by investment advisers and broker-dealers with respect to the prevention of market manipulation. In particular, examiners will look at whether supervisory and compliance controls are reasonably designed to "prevent the intentional creation or spreading of false