The Serious Fraud Office (SFO) and the City’s top regulator are considering whether to start an investigation into the collapse of Weavering Capital, a $637 million London hedge fund, which had to call in the liquidator PricewaterhouseCoopers after discovering a series of suspect derivatives trades.

The SFO yesterday said it would seek “an early meeting” with PricewaterhouseCoopers (PwC), which was brought in yesterday as Weavering’s main fund began to implode.

The SFO will contact PwC next week to seek a formal meeting. It is understood that it will seek the liquidator’s view about whether it should take the matter further.

The Financial Services Authority (FSA) declined to comment, but is understood to be considering its own inquiry into Weavering.

Questions have been raised over a series of interest-rate swap deals between Weavering in the Cayman Islands and a company registered in the British Virgin Islands, controlled by Magnus Peterson, Weavering’s chief executive.

Mr Peterson was last night still registered by the FSA as an authorised person, giving him the right to make regulated trades in London. The regulator declined to comment on why this was. Mr Peterson was unavailable for comment.

Mr Peterson, the former head of trading for SEB, the Swedish bank, set up Weavering in 1998. Both he and his wife are on the board of the UK company.

Mr Peterson’s stepfather and brother are directors of the British Virgin Islands company revealed as the counterparty to the trades.

The Mayfair-based fund’s research director is James Stewart, an economic commentator who has made regular television appearances.

Investors in the hedge fund were braced for losses of hundreds of millions of dollars in the wake of its collapse. Matthew Wilde, of PwC, said investors who have already put in redemption calls for $133 million – with a further $65 million in the pipeline – could see some of their money returned.

PwC was brought in yesterday to liquidate assets of Weavering’s main fund, Macro Fixed Income, which were once valued at $637 million.

Mr Wilde said: “Obviously it will depend on the success of the various actions that will be undertaken by the liquidators, but there will be a significant shortfall for creditors.”

Mr Wilde said that the swap arrangements between the Cayman Islands and BVI companies were common, but that the “related party” ownership structure was not.

Weavering told investors a week ago that it was “urgently” investigating its position, which came to light after the hedge fund was hit with a barrage of redemption calls.

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