The US financial regulator has launched about a dozen investigations into bundled financial instruments, including a probe covering two Bear Stearns funds that face collapse after understating losses connected to the US mortgage market.

The Wall Street Journal, part of the Dow Jones group that owns Financial News, reports that the Securities and Exchange Commission is conducting "about 12" investigations concerning collateralised debt obligations and collateralised loan obligations, citing SEC chairman Christopher Cox. The probes are part of a broader examination of how hedge funds value their assets.