Eliot Spitzer, the New York state Attorney General, is examining claims that Gotham Partners, the ailing US hedge fund, took positions in credit derivatives that created the appearance that certain companies were in financial danger.

The investigation is focused on whether Gotham, which recently told investors that it planned to wind down its main funds, acted improperly when it bought credit-derivative protection on Farmer Mac and MBIA Inc. Also under investigation is the possibility that Gotham was "front-running" its own research.