A South African market regulator said on Friday it was reviewing volatile trading activity sparked by market speculation that a research group would release a negative report on a listed firm.
The regulator confirmed in an emailed response to questions that it was reviewing unusual activity in Aspen Pharmacare, whose shares plunged 10% on Tuesday prompting it to say it was aware of speculation New York-based Viceroy Research would release damaging information about the company.
Aspen, whose shares have since recovered, said it had never been contacted by Viceroy.
The Financial Services Board (FSB) was working with the Johannesburg Stock Exchange to determine whether to open a formal investigation, FSB spokesperson Tembisa Marele said.
"The specific mandate of the FSB in this area, according to the Financial Markets Act is to investigate cases of insider trading; price manipulation; and false reporting," Marele said.
Johannesburg Stock Exchange director of market regulation Shaun Davies said a review was underway and it was a market offence "to make false statements about listed securities" but added that it was not clear if there had been any misconduct.
Speculation that Viceroy would publish damaging research on a company also hit real estate investment trusts, such as Resilient Reit, Fortress Reit, and Greenbay Properties.
The FSB said it had not decided whether to investigate movements in property stocks.
Fortress Reit chief executive officer Mark Stevens said the market was "speculating wildly on unsolicited rumours" but said it was business as usual at his firm.
There was no immediate comment from the other real estate firms.
Viceroy, which describes itself as "a group of individuals who see the world differently" on its website, said it would not comment on the market speculation.
"Viceroy encourages people not to speculate on the identity of any companies we are researching and we advise caution in trading on gossip," it said in an emailed response to questions.