The US securities industry regulator is carrying out 150 active hedge fund investigations and more than 50 probes involving credit default swaps and other derivatives, Securities and Exchange Commission Chairman Mary Schapiro said yesterday, according to media reports.

The SEC also has about two dozen active municipal securities investigations, possibly involving arbitrage-driven fraud, public corruption and price transparency, Ms Schapiro told a financial press conference in Denver, Colorado.

Ms Schapiro, who has made enforcement one of her top priorities since taking the helm late in January, said the hedge fund investigations include possible Ponzi schemes, where early investors are paid with money from newer investors, misappropriations and performance smoothing.

Last year, the SEC ordered more than two dozen hedge funds, broker-dealers and big investors to hand over information about their trading in the securities of certain financial institutions such as American International Group and Lehman Brothers.

The order came as US markets were in a tailspin and financial services executives, investors and lawmakers feared market rumours would destroy Wall Street.

The SEC took steps to crack down on market manipulation and rumour mongering and the agency said investors with significant trading activity in financial firms or positions in credit default swaps would be required to disclose those positions to the SEC.