This article is the second in a three-part series discussing practical insights from a recent presentation on insider trading by K&L Gates partners Michael W. McGrath, Carolyn A. Jayne and Nicholas S. Hodge.  This article details eight prophylactic measures that hedge fund managers can implement to avoid insider trading violations.  This article also includes a detailed discussion of what McGrath called “the next great undiscovered country for enforcement actions.”  The first article in this series provided background on aspects of insider trading doctrine relevant to hedge fund managers (including entity liability and special considerations for CFA charter holders) and outlined four enforcement trends bearing directly on hedge fund trading strategies and operations.  The third article in this series will offer concrete recommendations to hedge fund managers for amending their compliance programs to incorporate lessons from recent insider trading enforcement actions.  For more on insider trading issues relevant to hedge fund managers, see “When Does Talking to Corporate Insiders or Advisors Cross the Line into Tipper or Tippee Liability under the Misappropriation Theory of Insider Trading?,” Hedge Fund Law Report, Vol. 6, No. 2 (Jan. 10, 2013).