The Latest on the U.S. stock market crash
The U.K. government will investigate whether hedge funds and private equity firms have been buying up stock at a time of political uncertainty, the Financial Conduct Authority said Friday.
The FCA said it will begin an investigation after it said it was asked to look into the sale of $9.3 billion of shares in a U.J. hedge fund.
It said the investigation, launched in May, is still open and will consider any potential criminal wrongdoing.
The firm that bought the shares, Renaissance Technologies, had bought at least two of the companies listed as holdings in the fund, and its shares have since tumbled about 2% after the market collapsed.
Renaissance is also under investigation by the FCA for potentially breaching securities laws by buying up a private equity fund.
The fund, called Alpha Group, is part of the hedge fund called Renaissance Technologies that has made billions of dollars from the sale and re-distribution of timber products.
The news came amid a major selloff in stocks, driven by worries about a slowdown in China’s economy and rising energy prices.
The selloff has been driven by fears that China will slow economic growth and boost its own economic growth rate in the second half of the year.