Hedge Funds

Perry probed by SEC on Mylan Labs deal


New York-based Perry Capital may face civil charges stemming from allegations that the $11.5 billion hedge fund shop violated securities laws in connection with the firm's investment in Mylan Laboratories.

In a "Wells notice" sent to Perry Capital, the U.S. Securities and Exchange Commission indicated that regulators were recommending an enforcement action against the firm.

At issue is Perry's investment in Mylan Laboratories, which in 2004 agreed to merge with King Pharmaceuticals. Perry accumulated significant stakes - and thus voting power - in both firms. But, according to federal regulators, Perry used "complex hedging techniques" that essentially removed