SEC said to be probing insider trading in ETFs

The U.S. Securities and Exchange Commission is investigating whether exchange-traded funds are being used to hide insider trading, a person with knowledge of the probe said. The funds, which usually track an index and trade like stocks, enable buyers to bet on price changes without trading futures. An investor with non-public information about a company may be able to hide illegal orders by trading in a fund that includes that stock instead of buying or selling the equity directly, the person said. The number of exchange-traded funds has surged since they were created in 1993, widening investors' access to different assets, including commodities. The SEC has said it is using data-driven techniques to find patterns of insider trading and market manipulation. The probe was previously reported by the Financial Times. --Bloomberg News--