New York Attorney General Andrew Cuomo Thursday said his department is conducting an investigation into whether some investors used illegal methods to profit from recent declines in banking and insurance stocks. It is alleged that some investors combined the short-selling of stock with the spreading of false information to illegally gain from recent devaluations in Lehman Brothers, AIG and other stocks. Cuomo said his office will prosecute those found to have intentionally contributed to the declines under a New York law, which gives him broad authority to investigate financial crimes. On Friday, the Securities and Exchange Commission implemented a temporary ban on certain kinds of short-selling of key financial stocks in an attempt to stabilize their values.

In an effort to better detect other kinds of financial fraud, including insider trading, in August the SEC announced that it had reached a tentative agreement with ten US stock exchanges to centralize insider trading controls among the institutions. Under that plan, the programs to prevent and detect insider trading will be monitored by the Financial Industry Regulatory Authority and a section of the New York Stock Exchange, instead of having each exchange run its own program.