Was Bear Stearns stock manipulated into a tailspin?

With all of those options that traded last week in Bear Stearns, many have been wondering if the firm was helped into the abyss. Apparently, now the SEC may be wondering the same thing:

U.S. regulators are investigating whether traders illegally sought to force Bear Stearns Cos. shares into a tailspin last week by spreading false information about the firm's finances, two people familiar with the inquiry said.

The Securities and Exchange Commission probe is focusing on whether hedge funds or other investors bet on a drop in the company's shares while disseminating rumors that the New York- based company was nearing collapse, said the people, who declined to be identified because the inquiry isn't public. The New York Stock Exchange's regulatory arm is also involved in the investigation, the people said.