Is there a law against hedge funds loaning out shares of companies they lend money to?

Anyone know?

UPDATE 11/24

funds cannot short shares ahead of a pipe

And, the S.E.C. says, it is illegal to use the shares obtained from the PIPE to repay the shares borrowed, since that would amount to having sold the PIPE shares too early.

The investor is supposed to buy other shares to cover the short position, and then sell the PIPE shares separately. If the shares are illiquid, there is a risk that prices will move, leaving the trader with a loss.

In addition, the S.E.C. says, it is illegal insider trading to sell the shares short if the seller knows a PIPE deal is coming, but that fact has not been announced to the public.

but can they loan these shares for a profit so someone else can short?