Hedge Funds

SEC looks into IPO conflicts


The big investment banks have found themselves under renewed scrutiny from the Securities and Exchange Commission, this time over IPO allocations and the investment in hedge funds made by employees. The clear suggestion is that the SEC is worried that the relationship between brokers and hedge funds may be far too close.

People familiar with the information-gathering effort say that the SEC had asked for documents, such as lists of hedge fund investments made by bank employees, as well as commission records showing to whom the employees sold securities, and for what level of fees.

Typically, U.S. bank employees are