American prosecutors apparently have mounted a criminal investigation into two Bear Stearns hedge funds that collapsed during the sub-prime crisis.

The US Attorney in Brooklyn has requested information on the failed funds from the investment bank, according to The Wall Street Journal, but has not issued subpoenas.

The US Securities and Exchange Commission (SEC), the financial regulator, is already looking closely at the hedge funds.

Criminal inquiries into hedge fund trading practices are rare, and one legal expert told the Journal that a case would be difficult to prove.

"It's a tough case to make unless they have turned up some sort of malfeasance," Christopher Clark, a partner at Dewey & LeBoeuf, said.

"The law assumes the investors are sophisticated and understand the risks. This was clearly a high-risk investment strategy."

In the wake of the sub-prime crisis, the SEC recommended raising the amount of wealth necessary for private individuals to be allowed to invest directly in hedge funds from $1 million (£490,000) to $2.5 million.

The collapsed hedge funds lost $1.5 billion dollars between them.

Bear Stearns had come under pressure from investors who had recruited forensic accountants to scrutinise the collapse.

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