Stock-Lending, Family Style

For the Lando clan, the business of lending stock to short-sellers is a family affair. But now some investigators are wondering if something more may have bound the Landos together.

The lucrative niche this New York-area family has carved out is now being threatened by a wide-ranging investigation into alleged securities lending improprieties. Several members of the Lando family are drawing scrutiny from regulators and prosecutors, who are examining stock-loan transactions in which multiple family members allegedly had a hand in either negotiating or arranging.

In July, TheStreet.com was first to report that federal prosecutors had launched a broad probe into price gouging in the market for borrowed stock. The government is probing allegations that employees of some Wall Street trading desks were either receiving kickbacks from, or splitting fees with, so-called stock-loan finders. ...