The Commodity Futures Trading Commission cleared the Clinton Group of any mispricing in determining the valuation of its hedge fund portfolios, according to a letter sent to the remaining investors.

"We are very pleased to inform you that at this time the U.S. Commodity Futures Trading Commission has notified us that it has closed its investigation of the Clinton Group without further action," the letter said. "We believe the CFTC's action is consistent with our confidence in the integrity of our valuation practices and methods."

The Clinton Group declined to comment on the letter. The group manages $1.4 billion in five hedge funds, and manages another $4.5 billion in collateralized debt obligation pools.

Clinton's hedge funds have dwindled by about $4 billion, mostly through investor withdrawals, since last October, when senior trader Anthony Barkan resigned and issued a statement that he was concerned about the pricing of certain bonds in the hedge funds' asset-backed and mortgage-backed securities portfolios.

In November, the CFTC and SEC began investigating the hedge fund unit, which had about $5.5 billion under management last summer. Both agencies Tuesday declined to comment.

Investors received the letter about the CFTC investigation last week. It was preceded the week before by news of a major management shake-up and plans to explore distressed debt and merger arbitrage strategies.

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