The U.S. Department of Justice has launched an expansive criminal investigation into short selling by hedge funds and research firms, according to three people familiar with the matter. Investigators are probing the relationships among the hedge funds and firms that publish negative reports on certain companies, often with the aim of sending the stock lower, the people said. The Justice Department, which declined to comment on Friday, issued subpoenas to dozens of companies early this year, which included requests for funds" trading records, and issued a second round of subpoenas in recent months, according to the three sources. The Justice Department is scrutinizing trades in dozens of stocks, some of which were the subject of negative reports, the people said. Bloomberg News first reported the probe on Friday, adding that authorities are examining whether the funds engaged in insider trading or other abuses. Anson Funds and Marcus Aurelius Value are among the firms under the scanner of the investigators, according to Bloomberg. The companies did not immediately respond to a request for comment. Among the stocks whose trading activity the Justice Department is examining are Luckin Coffee Inc and GSX Techedu Inc (GOTU.N), on which Carson Block"s Muddy Waters Capital and Andrew Left"s Citron Research circulated research, Bloomberg said. In a statement, Citron Research said it "knows of no wrongdoing and has cooperated fully with the government"s investigation." Trading in short targets such as Santa Ana, California-based Banc of California Inc (BANC.N) and Mallinckrodt Plc (MCDG.MU) is also being examined, Bloomberg reported. The Justice Department probe comes after the U.S. securities regulator earlier this year said it is considering measures to require big investors to disclose more about short positions, or bets that stocks will fall and the use of derivatives to bet on other stock moves. The regulator also moved to protect small investors from trading apps that use features common to video games in order to boost risky trading activity. The review of rules by the Securities and Exchange Commission was prompted by January"s GameStop (GME.N) saga and the meltdown of Archegos Capital. Citron, one of the world"s best known short-sellers, in January said it would publicly stop detailing companies" shortcomings following backlash against it and others who said retailer GameStop"s stock is not worth its price. Reporting by Niket Nishant and Noor Zainab Hussain in Bengaluru and Chris Prentice in Washington; Editing Nick Zieminski and Alistair Bell Our Standards: The Thomson Reuters Trust Principles.