The U.S. Justice Department has launched an investigation into whether hedge funds might have acted together in betting against the euro, a source familiar with the situation said on Wednesday.

The Wall Street Journal, citing people familiar with the matter, said the department has asked hedge funds including SAC Capital Advisors LP, Greenlight Capital Inc, Soros Fund Management LLC and Paulson & Co to retain trading records and emails relating to the euro.

SAC, Greenlight and Paulson declined comment to Reuters about the reported request, while Soros Fund Management failed to respond to inquiries. The Justice Department also declined to comment.

The euro has come under selling pressure during the Greek debt crisis, losing over 10 percent since November, and the newspaper said the request, dated February 26, coincided with its article describing gatherings of hedge fund managers where the euro was discussed.

The Justice Department's letter said the antitrust division has opened an investigation into agreements among various hedge funds that trade euro contracts, the newspaper quoted a source as saying.

The letter requested that the funds preserve all documents and electronic communications relating to agreements to trade the euro or communications about agreements to trade currencies, the source said.

The letter being described matches the description of a preservation order, where the Justice Department asks for information to be retained that would help them determine if there was a plan to collude or enforcement of that collusion, said Andrew Gavil, who teaches antitrust law at Howard University.

Either could be very damning and could lead to criminal indictments, he said.

The reported Justice Department probe comes at a time when financial institutions are facing scrutiny over their role in the Greek financial crisis.

Critics accuse Wall Street firms of exacerbating the crisis by first helping governments mask their debts through derivatives deals only to benefit later by driving down the value of securities related to them.

Last week, Federal Reserve Chairman Ben Bernanke said the U.S. central bank was looking into derivatives transactions that financial firms made with Greece.

But the idea of collusion among hedge fund traders made no sense to Evan Stewart, an antitrust expert with the law firm Zuckerman Spaeder LLP.

Hedge fund managers tend to.... make their own bets and generally guard the secrecy of their own bets because they think they're smarter than the next guy, he said.

It's hard to understand what the motivation would be for hedge fund managers to collude... but maybe there's some evidence that they tried.

Adair Turner, chairman of Britain's Financial Services Authority, said on Tuesday that the total amount of CDS short positions in the area of Greek problem debt was only 3 percent to 4 percent of outstanding Greek sovereign debt.

The biggest driver is confidence levels and actions of long investors, he said.

(Reporting Jennifer Ablan in New York and Diane Bartz in Washington; Editing by Neil Fullick and Tim Dobbyn)