SEC eyes hedge funds for insider trading

The Securities and Exchange Commission is examining hedge funds for signs of insider trading, demanding information about relationships between managers, employees, family members and public companies. Officials from the SEC told hedge funds to list clients or workers who serve as directors of publicly traded companies, along with the names of any relatives who hold such posts, according to a 27-page letter to industry executives that was obtained by Bloomberg News. The SEC confirmed the letter's authenticity to the news agency. The regulator's New York office began using the new examination letter, which is more extensive than previous versions, after lawmakers questioned the agency's record in detecting illegal trading, the report stated. In addition to information about officers and directors, the SEC wants the identities of any relatives who work at brokerage firms, as well as a detailed description of any ``deal'' that a fund manager ``was asked to consider'' and turned down ``because the proposal was deemed inadvisable, inappropriate, unethical, or possibly illegal.'' The letter asks for e-mail addresses and contact information for all parties involved, reported Bloomberg.