U.S. securities regulators are looking at some trades of hedge funds Carlson Capital LP and Appaloosa Management LP, a person familiar with the matter said on Thursday.

The Securities and Exchange Commission is looking at trades by the Dallas-based Carlson, which manages $4.9 billion in investments, relating to four secondary stock offerings made between late 2007 and the middle of 2009, the source said.

The SEC is inquiring into trades made by Appaloosa, a $13 billion hedge fund, when Wells Fargo & Co had a secondary offering, Appaloosa said.

An Appaloosa spokesman said the firm is cooperating fully with the SEC inquiry. Any way you slice it, the trades involved in this inquiry are not material to Appaloosa based on its balance sheet or assets under management, the spokesman said.

The Wall Street Journal first reported the SEC probes.

A spokesman for Carlson said the hedge fund has been cooperating voluntarily and fully with the SEC relating to an inquiry in connection with 'Rule 105,' and will continue to do so.

Rule 105 prohibits a short seller from covering short sales with offering securities purchased from an underwriter or broker five days prior to pricing of the securities.

The reason for the prohibition is that pre-pricing short sales that are covered with offering shares artificially distorts the market price for the security, the SEC said on its website.

An SEC spokesman had no comment.

(Reporting by Sakthi Prasad in Bangalore and Rachelle Younglai in Washington; Editing by Muralikumar Anantharaman and Gerald E. McCormick)

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