Hedge Funds

SEC investigates PIPE trades


The Securities and Exchange Commission is reportedly looking into hedge fund investments into PIPEs, or private investments in public equities, on the grounds that they may be using non-public information to profit from short sales, according to a Dow Jones wire service report, which cited an individual familiar with the matter.

The report said the SEC's office of inspections, compliance and examinations requested documents from about 20 brokerage firms that reportedly introduced hedge funds to companies thinking about engaging in PIPE deals. PIPEs enable small- to mid-cap public companies to raise money without undertaking a secondary public offering.