U.S. SEC investigating hedge fund Melvin Capital Management – WSJ

(Reuters) – The U.S. securities regulator is trying into Melvin Capital Administration’s danger controls and investor disclosures after the hedge fund was hammered by the meme-stock rally final 12 months, the Wall Road Journal reported on Thursday.

The Securities and Alternate Fee (SEC) contacted the hedge fund’s traders in latest months and is probing whether or not the corporate misled them when it raised cash final 12 months, the report stated, citing individuals conversant in the matter.

The SEC can also be looking for data on what the agency, based by Gabe Plotkin, disclosed concerning the dangers of its funding technique to purchasers, based on the report.

Spokespeople for the SEC and Melvin Capital didn’t instantly reply to Reuters requests for remark.

Melvin Capital stated in Could it could shut down after taking a beating throughout this 12 months’s market hunch. The hedge fund additionally posted heavy losses in 2021, partly due to its bets towards meme-stock GameStop Corp.

(Reporting by Niket Nishant in Bengaluru; Enhancing by Aditya Soni)