WASHINGTON (AFP) -- The head of the Securities and Exchange Commission, Christopher Cox, hinted strongly Thursday that the U.S. market watchdog was probing suspicious trading linked to Bear Stearns' downfall.

Cox spoke as members of the Senate Banking Committee quizzed him over suspicious share trading in Bear Stearns' stock that occurred in early March as the troubled investment bank faced potential collapse.
""I would hope you're looking at this. This must have triggered some bells and whistles at the SEC,"" the panel's Democratic chairman, Christopher Dodd, said to Cox at a hearing into Bear Stearns' takeover by JPMorgan Chase.
""Your hopes I think will be met and exceeded with regard to the agency's response,"" Cox said.
The SEC chairman declined to elaborate, but lawmakers read his remarks as confirming that the agency was conducting a probe into potential improper trading in Bear Stearns' stock.
Short selling
Senator Jon Tester asked Cox if he had seen any evidence suggesting that speculators had bet heavily that Bear Stearns' share price would fall, known on Wall Street as ""short selling.""
""I'm a little bit constrained because the SEC is in the law enforcement business,"" Cox said.
Speculators can make legitimate profits if they place short selling bets and a stock subsequently declines in value, but the practice can be improper if it's tied to market manipulation or insider trading.
Without alluding directly to Bear Stearns, Cox stressed that the SEC pursues insider trading aggressively and said his agency was mulling ""several law enforcement matters"" that had not been filed in any U.S. court.
Trading in Bear Stearns' stock jumped substantially in the days leading up to March 14 as fears spread in the markets that the ailing bank would collapse due to its mounting losses on mortgage-related investments.
Bear Stearns' chief executive, Alan Schwartz, said the United States has strong laws barring speculators from engaging in market manipulation or insider trading and encouraged regulators to review rumors about improper trading in the bank's stock.
""I don't have any specific facts and I hope some facts will emerge over time. The nature and the pattern of the rumors ... I would just say that as an observer of the markets it looked like more than fear,"" Schwartz told lawmakers, referring to the bank's near demise.
Bear Stearns' stock was trading close to 11 dollars Thursday. The bank has agreed to be taken over by JPMorgan Chase in a deal backed by the Federal Reserve for just over one billion dollars.