Feds crack down on stock lending abuses

As the number of hedge funds willing to short stocks has grown in recent years, so has the complexity of finding enough shares to borrow. The stock-lending arena turned into a rough-and-tumble sort of market in which there were lots of whispers about dubious practices. Inevitably, regulators were forced to take a look. The result: Federal indictments have been handed up, charging eight individuals with various stock-lending crimes at investment banks, notably Morgan Stanley and Janney Montgomery Scott. The AP notes that the investigation found that stock-loan desk employee traders steered millions in fraudulent fees to so-called finders in exchange for bribes.

For more:
- here's the AP article

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