Billionaire Michael Platt’s BlueCrest Capital Management is being investigated by a U.S regulator over possible conflicts posed by an internal fund that manages money for the firm’s partners, according to people with knowledge of the matter.

The Securities and Exchange Commission started the probe last year into what was once one of the world’s largest hedge- fund firms, said the people, who asked not to be identified because the information is private. The investigation is being overseen by a unit of the agency’s enforcement division that focuses on potential wrongdoing involving asset managers, the people said.

Ed Orlebar, a spokesman for Jersey, Channel Islands-based BlueCrest, declined to comment. Judy Burns, an SEC spokeswoman, also declined to comment.

The opening of an SEC investigation is typically a preliminary step and doesn’t mean a firm will ever be accused of any wrongdoing. Enforcement actions must also be approved by a majority of the agency’s commissioners.

Falling Assets

BlueCrest announced in December that it would return client money after 13 years in the hedge fund industry, so it could focus on managing Platt’s wealth and that of his employees, including the employee fund. Platt, 47, said the decision was prompted by the declining fees and shrinking profitability of hedge funds.

The move came after BlueCrest investors pulled billions of dollars from the firm. Returns had lagged in recent years, and in 2014 a top consultant said the partner-only fund raised concerns that BlueCrest’s interests weren’t aligned with that of its investors.

Assets under management had fallen to about $8 billion in December, less than a quarter of the $37 billion the firm oversaw at its peak in 2013, according to statements from the firm and disclosures to investors. U.S. public pension plans were among investors that redeemed. BlueCrest also lost about $9 billion of assets in January 2015 when a computer-driven unit separated from the firm.

The employee fund, called BSMA Ltd, sparked controversy when Albourne Partners Ltd. told its clients two years ago that it had just learned of the fund’s existence. Albourne, one of the biggest advisers to pension funds and other institutional investors, said BSMA had $1.5 billion of assets and that BlueCrest hadn’t been sufficiently transparent when asked about potential conflicts.

Also in 2014, consulting firm Aksia LLC suggested that the investors it advises pull their money from BlueCrest because of a lack of transparency.