U.S. securities regulators subpoenaed firms including Deutsche Bank, Goldman Sachs and Merrill Lynch as it probes suspected manipulation of Lehman Brothers and Bear Stearns shares, Bloomberg said, citing two people familiar with the matter.

The U.S. Securities and Exchange Commission is seeking trading records and e-mails, one of the people told the news service.

The SEC has sent subpoenas to more than 50 hedge-fund advisers, seeking trading and communications data related to short-selling and options trading in Bear Stearns or Lehman Brothers, The Wall Street Journal said on Tuesday, citing a person familiar with the matter.

Rumours have been blamed for the collapse of investment bank Bear Stearns and for the significant slide in Lehman shares this month.

With financial stocks dropping dramatically over the year, lawmakers have been calling on the SEC to investigate whether short sellers and speculators are behind the move.

Over the weekend, the SEC announced plans to crack down on false rumours and said it was examining whether broker dealers and investment advisers had controls in place to prevent market manipulation.

The Securities and Exchange Commission settled two civil lawsuits Tuesday against a North Texas stock promoter allegedly involved in so-called pump-and-dump market manipulation scams.

One suit is still pending against five other people and one company.

The complaints allege that Coppell accountant Mark B. Lindberg, 40, helped market a series of penny stocks and, along with other defendants, reaped millions of dollars by releasing false information to pump up the share price.

In settling the cases, Mr. Lindberg neither admitted nor denied the allegations. He has agreed to a permanent injunction and is barred from being an officer or director. He also agreed to not be involved in penny stocks.

The initial suit involves an Irving company called Sniffex that Mr. Lindberg helped take public.

The company, which marketed a bomb detection device, is now called Homeland Safety International Inc. and was controlled primarily by two Bulgarians.

The complaint also names president Paul B. Johnson of Colleyville, who could not be reached for comment Tuesday, and two investors from Denmark. The suit still seeks penalties against the defendants other than Mr. Lindberg.

The Seoul Central District Court found Lee guilty of not paying about 47 billion won ($46 million) in taxes and fined him 110 billion won ($109 million).

But the court did not send Lee to prison, saying he just kept the assets in question after inheriting them under borrowed names from his late father — Samsung's founder — and that he did not actively seek to evade the taxes.

Prosecutors had demanded a seven-year sentence and 350 billion won ($347 million) in fines against Lee.

"The extent of his crime is not serious enough to sentence him to prison," Judge Min Byung-hun said. He sentenced Lee to three years in prison and then suspended the sentence for five years, meaning Lee will not go to jail as long as he avoid further legal woes.

South Korean judges have repeatedly shown leniency in high-profile corporate cases, refusing to send tycoons to prison for fears of the effects it would have on the country's economy.

The massive corruption scandal led to the investigation of 82 incidents involving 50 officers and reversal of more than 100 convictions tainted by police misconduct.

A jury in 2006 determined that the three men were each entitled to $5 million because they were wrongly arrested and charged with filing false police reports.

The three were implicated by former officer Rafael Perez, the central figure of the scandal in which officers were alleged to have beaten, robbed, framed and shot innocent people in the city's tough Rampart neighborhood. Dozens of officers were investigated, leading to some resignations and internal discipline, but only a small number of prosecutions.

Perez told investigators that the three men — Paul Harper, Edward Ortiz and Brian Liddy — had lied about finding a gun on a gang suspect during a 1996 arrest.

Harper and Ortiz are still with the department, but Liddy has left, according Officer Karen Smith, a LAPD spokeswoman.

The 9th Circuit U.S. Court of Appeals in its decision Monday noted that on three different occasions Perez gave investigators significantly divergent accounts of what allegedly happened during the arrest, including the inaccurate detail that a music sound system had to be dismantled at the arrest scene.

A state court jury did convict the three men in 2000 of conspiracy to obstruct justice in the framing of two reputed gang members. A Superior Court judge threw out the convictions a month later, citing faulty jury instructions.

Prosecutors decided not to pursue the case, and a judge dismissed the charges in 2004.

A sentencing hearing for Sidney Lowe II began Monday and is expected to end Tuesday in Guilford County Superior Court.

Defense lawyer Joe Cheshire said his client was "completely remorseful."

Lowe entered guilty pleas to six counts each of robbery with a dangerous weapon and kidnapping, possession of a weapon on educational property, possession with intent to sell and deliver marijuana and possession of ecstasy under a plea agreement.

The 23-year-old Lowe also entered a plea to a conspiracy to commit armed robbery charge from a shooting at the University of North Carolina at Greensboro. The plea means he doesn't admit guilt but says the state has enough evidence to convict him.

U.S. securities regulators need to be more aggressive in attacking manipulative rumor-mongering and short selling abuses, a prominent New York law firm said Monday.

In a memo to clients, Wachtell, Lipton, Rosen & Katz urged the Securities and Exchange Commission to conduct a 45-day study of the extent to which "abusive and manipulative short-selling and spreading of false rumors is taking place," and to issue a public report on its findings.

The law firm also called for the SEC to adopt rules as appropriate in response to its findings, and to bring enforcement actions against wrongdoers, coordinating efforts with criminal prosecutors where necessary.

Wachtell, Lipton's call to arms came one day after an unusual Sunday announcement from the SEC that it plans to begin immediate examinations into controls at brokerage firms, mutual funds, money management companies and hedge funds to prevent the deliberate spreading of false rumors to manipulate stock prices.

The SEC's examination into industry practices came after a rocky week of trading and concerns about the outlook for federal housing-finance giants Fannie Mae (FNM) and Freddie Mac (FRE) and for commercial and investment banks, including Lehman Brothers Inc. (LEH).

"While this is an important first step, the SEC needs to undertake additional bold measures to constrain abusive short-selling and rumor-mongering," according to the memo, signed by Wachtell, Lipton partners Edward Herlihy and Theodore Levine. The two recently urged the SEC to bring back restrictions on short sales when stock prices are declining, recommending a return to so-called "tick test" that forbade short sales when markets are ticking down.

SEC spokesman John Nester declined to comment.

Wachtell, Lipton is a leading advisor in corporate mergers, including the acquisition of Bear Stearns Cos. by JPMorgan Chase & Co. (JPM). Some former Bear executives have blamed the firm's collapse on market manipulation by short sellers and JPMorgan Chase Chief Executive Jamie Dimon recently said that the SEC should investigate whether Bear was brought down by a smear campaign.

Short sellers sell borrow shares in hopes of replacing them later at a lower price, profiting when the stock declines. While the practice is legal, critics say regulators have been ineffective in curbing abusive, manipulative short selling.