NEW YORK: The US Securities and Exchange Commission is investigating whether banks and private-equity firms violated bribery laws in their dealings with sovereign wealth funds, according to people familiar with the matter. Sovereign wealth funds, which are investment funds owned and generally operated by overseas governments, have invested in both private-equity managers and the biggest Wall Street firms over the past several years. In some cases, the sovereign funds have helped the firms stave off collapse. Sovereign wealth funds also invest in funds managed by private-equity firms. The wave of investments by sovereign wealth funds in US financial companies over the past several years included stakes in Citigroup, Merrill Lynch & Co. before its acquisition by Bank of America Corp., and Morgan Stanley. For example, China Investment Corp., which manages more than $300 billion, invested in both Morgan Stanley and Blackstone. The SEC has sent letters of inquiry to banks such as Citigroup Inc. as well as private-equity firms including Blackstone Group LP, the people said. The letters are said to have been sent to as many as 10 firms in the past week, a source said.Though the letters didn't contain specific allegations of bribery, they requested that firms retain documents and asked about the firms' dealings with sovereign
