* S.Korea probing Elliott over possible breach of disclosure rules
* Probe comes as Elliott seeks damages for 2015 Samsung deal
* Elliott takes on powerful conglomerates Samsung and Hyundai (Changes dateline, recasts with new attribution)
By Ju-min Park and Liana B. Baker
SEOUL/LOS ANGELES, May 3 (Reuters) - South Korean prosecutors are looking into U.S. activist fund Elliott Management to see if it violated disclosure rules during the fund's 2015 purchase of shares in Samsung C&T Corp, an official with the prosecution said on Thursday.
The official confirmed earlier reports in local media that the investigation related the acquisition.
Prosecutors are probing whether it breached any disclosure rules when it acquired shares in Samsung C&T through total return swaps, the official said without providing further details.
Elliott denied any wrongdoing and said it had cooperated with South Korean prosecutors regarding the case.
"Elliott used swaps lawfully and in a manner consistent with Korean law," the fund said in a statement, referring to the process of its share purchase.
The U.S. fund has said it was seeking to negotiate with the government regarding compensation for its damages over a former South Korean administration's intervention in the merger.
It has begun a legal dispute with the South Korean government over the 2015 tie-up, a government official said on Tuesday.
Elliott has challenged the country's top two family-run conglomerates, most recently Hyundai Motor Group, over better corporate governance and returns to shareholders.
In 2015, the activist fund took on Samsung, South Korea's largest family-run conglomerate. It narrowly failed to block an $8 billion merger between Samsung C&T and Cheil Industries, which it argued was unfair.
The deal later became the centre of a corruption scandal that led to the arrests of former President Park Geun-hye and the heir to the Samsung empire, Jay Y. Lee last year.
Elliott held about 7 percent of shares in Samsung C&T at the time.
Yonhap News Agency reported late on Wednesday that South Korean prosecutors had notified the fund's officials of a plan to interview them, but cited a prosecution official as saying it might be difficult to question them as they are outside South Korea. (Reporting by Ju-min Park in SEOUL, Liana Baker in LOS ANGELES; Editing by Dan Grebler and Sam Holmes)