Shares of Bristol-Myers Squib have tanked in recent days thanks to a barrage of bad news including a federal probe into the recent settlement of a patent dispute and increased competition from a generic version of its popular Plavix blood thinner.

But now regulators are examining whether some investors may have improperly benefited from the company's recent misfortunes, CNBC has learned.

            At issue: A huge run up in "short interest" in the company's stock just prior to all the negative publicity that caused shares of Bristol-Myers to slide more than 19% in recent weeks.

Short interest is the amount of stock that is sold short, which allows investors to make money when stock craters. Following a complaint by the company, officials at the NYSE are now examining whether some investors may have had advanced warning of the company's problems when they made their bet, according to people with knowledge of the NYSE's activities.

            One thing is certain: The run-up in short interest in the stock is significant. Company officials confirm that short interest equaled 27 million shares on June 15, the last reporting date. By July 15, short interest more than doubled at 47 million shares. The next reporting date is Aug. 15 so the number might be larger, at the moment though, short interest amounts to a whopping 10% of the 2 billion shares outstanding in the company's stock.

More interesting is the timing of the ramp up. Bristol-Meyers recent misfortunes began circulating in the media in late July when the FBI raided its offices in a Justice Department probe of its patent deal with a generic drug maker over Plavix. That began a barrage of negative news for the company including announcements of declining profits, and most recently, an announcement by Apotex that it will indeed release a generic drug to compete with Plavix.

            In recent months, regulators have increased oversight of the once lightly regulated market for short selling. The NYSE, for instance, has launched a probe of Vonage's IPO, which sank from $17 a share to around $7 and whether short sellers improperly benefited. Allegedly improper short selling has attracted congressional scrutiny and the SEC has recently tightened rules on so call naked short selling.

            It's unclear whether the NYSE interest in the Bristol-Myers issue will lead to charges but one thing is certain, company officials believe someone had advanced knowledge of the problems based on the huge increase in short selling they've discovered just prior to the recent announcements.