HBK Talks Settlement

Hedge fund giant HBK Investments is looking at paying the biggest penalty yet in a two-year-old investigation of abusive trading in the so-called PIPEs market.

The $7 billion Dallas-based hedge fund is in active settlement talks with the Securities and Exchange Commission to resolve allegations of improper short sales. The fund allegedly made improper trades in two companies that were selling discounted stock in private investments in public equity, or PIPEs, deals.

People familiar with the hedge fund say no settlement is imminent. HBK officials, however, have made it clear to investors who have inquired about the investigation that they want to put the matter behind them. ...