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Melvin Hedge Fund Probed by SEC Over Risk Controls, Client Communications

  • Plotkin’s firm closed after losses on meme stocks, other bets
  • Before shutdown, he told investors he’d keep firm operating
Gabe Plotkin 

Gabe Plotkin 

Photographer: Alex Flynn/Bloomberg

Melvin Capital Management, the hedge fund that Gabe Plotkin closed earlier this year, is being investigated by the US Securities and Exchange Commission over whether the firm misled investors about its risk controls and intentions to recoup losses on its wrong-way bets on meme stocks, according to people familiar with the probe.

The SEC requested that Melvin hand over its written communications to investors, the people said, asking not to be identified discussing information that isn’t public. The regulator has received those communications in recent months, they said. The investigation is in early stages and it may not end with a claim of wrongdoing.