Scammers, Spammers, and Slammers

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Wall Street's next scandal

The SEC is investigating whether some of Wall Street's top investment banks are using inside information. Fortune's Shawn Tully explores the potentially explosive scandal.

The SEC is also likely to scour trading records to see if the brokers are using info about clients' moves to invest their own capital. If the SEC finds evidence that they are, the scandal would be enormous - and go to the heart of Wall Street's profit machine.

http://money.cnn.com/magazines/fortune/fortune_archive/2007/03/05/8401273/index.htm

A big question mark hangs over Wall Street: How is it that the top firms consistently beat the odds, earning spectacular returns on their own investments? Last year the five biggest U.S. investment banks - Morgan Stanley (Charts), Goldman Sachs (Charts), Merrill Lynch (Charts), Lehman Brothers (Charts) and Bear Stearns (Charts) - generated $61 billion from proprietary trading, about half their total revenue and a 54 percent increase over 2005.