U.S. regulators are examining a whistle-blower’s claims that Deccan Value Investors harmed Yale University’s multibillion-dollar endowment when the Ivy League school pulled about $400 million from the hedge fund in 2019, said two people familiar with the matter.

The Securities and Exchange Commission started asking Deccan general questions—including queries about how it handled Yale’s investment—last year after the tipster alleged that securities managed on the college’s behalf were sold at prices below the best available in the market, said the people who asked not to be named because the request was private. Information on how Yale’s position was unwound were among details sought by officials in the SEC’s enforcement division, the people said.

The review of Greenwich, Connecticut-based Deccan is in its early stages, according to the people, and may not lead to any further action by the SEC. The regulator receives thousands of tips each year from whistle-blowers, only a fraction of which lead to successful enforcement cases.

If shares were sold at below-market values, the amount of cash that Deccan had to return to Yale when it pulled its investment could have been reduced. There’s also a possible conflict of interest, because the whistle-blower alleges some of the securities were bought by other investment pools Deccan manages, potentially enabling the funds to buy the shares at more favorable prices. Yale has never complained to Deccan about its redemption, one person familiar with the matter said.

“When trading securities on behalf of its investors, Deccan acts in the best interest of all its clients and in every instance transacts at the prevailing market price or otherwise using a price determined by an independent third party agent,” Deccan said in a statement. “Deccan is not aware of any errors or inaccuracies in the pricing of any portfolio securities.”

Spokespeople for the SEC and Yale declined to comment.

The whistle-blower’s allegations highlight a concern that the SEC has flagged in recent years: that hedge funds may not be adequately informing investors about conflicts. In a June 2020 report, the regulator made clear that some funds are falling short, including when selling assets between different accounts that are managed by the same firm.

“The staff observed private fund advisers that inadequately disclosed conflicts related to purchases and sales between clients, or cross-transactions,” the SEC wrote in the report, which didn’t name any specific firms. “For example, advisers established the price at which securities would be transferred between client accounts in a way that disadvantaged either the selling or purchasing client.”

Deccan was founded in 2010 by Vinit Bodas, according to a filing with the SEC. As of March 2020, the firm managed about $2.7 billion in regulatory assets, a total that includes leverage, or borrowed money, the filing shows.

Deccan’s focus is stocks, predominantly betting that they will rise, though it does occasionally engage in short selling, according to the filing. Its investors have included several college endowments, including those for the University of Pennsylvania, Columbia University and Stanford University, said one of the people.

New Haven, Connecticut-based Yale, along with many of the richest university endowments, uses outside firms instead of managing its assets internally. The school’s $31.2 billion endowment returned 6.8% as of June 30, the fourth-best performance of the eight Ivy League schools, according to data compiled by Bloomberg. Yale’s 10-year performance is the highest among Ivy League colleges.

David Swensen has run Yale’s fund for more than 30 years and helped pioneer how institutional investors manage their assets, using more sophisticated investments like hedge funds and private equity to boost returns instead of buying plain-vanilla stocks and bonds.

With assistance from Katherine Burton.

This article was provided by Bloomberg News.