New York Attorney General Andrew Cuomo said Thursday that he is starting a "wide-ranging" investigation into short-selling on Wall Street, particularly in financial stocks.

On a conference call with reporters, Mr. Cuomo said he intends to use New York's Martin Act to prosecute short sellers who spread false rumors and engage in other improper conduct. He said he is looking into short-selling in a number of financial firms' stocks, including Lehman Brothers Holdings Inc., American International Group Inc., Goldman Sachs Group Inc., and Morgan Stanley Inc.

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