The Financial Conduct Authority (FCA) has launched a probe into rugby club Wasps, according to the Financial Times.
The watchdog is trying to determine whether the 152-year-old Premiership club misled the market about the state of its finances and how quickly it rectified the situation.
According the report, the FCA has opened a formal investigation and is calling in individuals for interviews.
Both the FCA and Wasps declined to comment.
The probe comes after Wasps breached its bondholder covenants at the end of 2017 by £1.1 million after classing shareholder contributions as income. It blamed the error on 'accounting irregularities'.
The £1.1 million was linked to Irish businessman and Wasps owner Derek Richardson, who injected the cash into the club. Once this investment was stripped out, the club's earnings were £2.4 million, rather than the £3.5 million it originally reported.
Investors piled into Wasps' retail bond when it launched four years ago, stumping up more than the £35 million the club was aiming to raise.
The bond, which is tradable on the London Stock Exchange, is fixed at an annual gross rate of interest of 6.5% until 2022.
The bond was launched shortly after Wasps moved to its 32,600-seater stadium at the Richo Arena in Coventry from Adams Park, High Wycombe, in December 2014.