Knight Trading Denies FBI Raid, but Shares Plunge Anyway

Knight Trading fell sharply Friday, first on rumors its offices had been raided by the FBI, which the company denied, and later on a CIBC World Markets downgrade of its shares.

A spokeswoman said: "The FBI rumors are false, there is no criminal investigation going on by FBI or SEC." Nevertheless, Knight's shares closed off 13.9% to $6.85.

Investors have been more apt to react to any rumor of an investigation after the Enron meltdown, but some say investors have good reason to worry about Knight, and not necessarily because of any police actions. ...