Fed Investigated Lehman Rumors

(Reuters) – The Federal Reserve acted on rumors last month and called Credit Suisse Group to see if it had pulled a credit line from Lehman Brothers Holdings Inc, The Wall Street Journal said citing people familiar with the matter.

Credit Suisse told Federal Reserve officials that there was no truth to the rumor and it had no intention of pulling the line of credit, the paper cited the people as saying.

A person familiar with the rumor told the Journal that it was circulating in early July.

Fed officials contacted Credit Suisse last month, but it is unclear whether the move occurred before or after the U.S. Securities and Exchange Commission subpoenaed dozens of hedge funds and financial firms about four Lehman-related rumors, the paper said.

Market manipulation and rumors led to the demise of investment bank Bear Stearns in March.

Lehman Brothers and Credit Suisse could not be immediately reached for comment.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Erica Billingham)