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InfoUSA Inc's spending under investigation

The Securities and Exchange Commission has launched an inquest into spending by database marketer InfoUSA Inc.

The Omaha-based company said in a filing Tuesday that it would cooperate with the SEC's request for documents related to expense reimbursement, transactions with related parties, some corporate expenditures and certain trades of company stock.

The company did not specify what spending the SEC is looking for, but a lawsuit two hedge funds filed earlier this year may offer some clues.

InfoUSA did not immediately respond to a message seeking comment Wednesday.

The hedge funds - Cardinal Value Equity Partners and Dolphin Limited Partnership - say InfoUSA's chief executive misspent millions of dollars in corporate funds.

The funds say InfoUSA paid for use of a jet plane, the 80-foot (25-meter) yacht American Princess, condos in Hawaii and California and a University of Nebraska-Lincoln stadium box.

Some of the $28 million (19 million EUR) in "related-party transactions" the hedge funds have questioned included payments to Annapurna Corp. which InfoUSA founder and CEO Vin Gupta owned.

The lawsuit also questions why Gupta used private jets to fly Bill and Hillary Clinton on business, personal and campaign trips, and why Gupta gave Bill Clinton a $3.3 million (2.2 million EUR) consulting contract.

According to the lawsuit, InfoUSA has spent nearly $900,000 (607,533 EUR) since 2001 flying the Clintons to domestic and international locations and political events.

In the past, Gupta and InfoUSA have said the jet, condos, stadium box and American Princess are for entertaining clients.

The company has come under scrutiny for its policies concerning the sale of personal information.

The New York Times reported in May that InfoUSA, which compiles consumer information and sells it to direct marketing companies and others, sold the names of senior citizens, including millions with Alzheimer's disease and others whom it identified as gamblers, with labels that said things such as, "These people are gullible."

The company has denied those allegations and said it does everything it can to ensure it does not do business with scam artists.