As the probe in short practices heats up, securities lending continues to be a very lucrative endeavor. Investment banks make about $10 billion a year in fees for loaning stocks and bonds to short sellers. The short ranks, as you know, have been swelling for years. Now, according to Business Week Online, Federal prosecutors are close to charging current and former employees of several top firms with taking part in a complex kickback scheme. Individuals at Bear Stearns and Morgan Stanley are said to be under the most scrutiny. Others from Goldman Sachs and Merrill Lynch are also part of the problem. The issue seems to be whether stock loan officials received kickbacks from middlemen whose job it is to scour the Street for loanable shares. These middlemen have been controversial for years. Stay tuned.

For more:
- here's the article Business Week Online