US authorities are investigating individuals close to NIR Group on whether the US hedge fund firm paid kickbacks to outsiders to inflate the value of its holdings, The Wall Street Journal said, quoting unnamed sources.

US authorities have been investigating the company since last year on whether managing member Corey Ribotsky defrauded investors about their returns and the holdings of his various funds, the publication said.

The news report did not say whether Mr Ribotsky had been contacted for possible comment on the matter.

Mr Ribotsky managed more than $780 million in hedge fund assets last year. The company reported eight years of positive returns in its biggest fund starting 2001, it said.

Since the credit crisis erupted more than two years ago, the turmoil has revealed a number of scams involving financial professionals, including hedge funds. The biggest scandal so far has been that of Bernard Madoff’s Ponzi scheme. The saga has shone a bright spotlight on the importance of due diligence checks by wealth managers on investments and the people overseeing them.