The SEC is trying to find out if Paulson suggested in the meeting that the government was willing to bail out struggling mortgage-finance companies Fannie Mae and Freddie Mac, the WSJ said. (r.reuters.com/vur62t)

Subsequently, the federal government took over Fannie and Freddie amid heavy losses less than two months after the meeting.

SEC recently sent subpoenas to parties who were present at the July 2008 meeting, the Journal said adding that Paulson hasn't been handed one.

Parties present at the meeting included Taconic Capital Advisors, GSO Capital Partners, now part of Blackstone Group LP, Lone Pine Capital LLC, Och-Ziff Capital Management Group LLC and TPG-Axon Management LP, WSJ said.

Taconic confirmed the receipt of a subpoena and declined any wrongdoing, the Journal said.

A Blackstone statement affirmed that the company doesn't believe that any 'market sensitive information' was discussed in the said meeting and added that it didn't take any position on the mortgage firms, the WSJ said.

An SEC spokesman declined to talk to the Journal.

None of the parties could immediately be reached by Reuters outside of U.S. business hours.

(Reporting by Sunayan Bhattacharjee in Bangalore; Editing by Muralikumar Anantharaman)

• A Permanent Economic Emergency