The SEC’s Division of Enforcement (Division of Enforcement) has redoubled its efforts to prosecute those engaged in various securities law violations by initiating a record 735 enforcement actions in 2011.  One of the SEC’s key initiatives has focused on ferreting out insider trading, and a number of the targets have been hedge fund managers and their personnel.  See “SEC Files Civil Insider Trading Complaint Against Diamondback Capital Management, Level Global Investors and Seven Individuals Based on Trading in Dell and Nvidia; Diamondback Strikes Non-Prosecution Deal with U.S. Department of Justice and Settles with the SEC for $9 Million,” Hedge Fund Law Report, Vol. 5, No. 4 (Jan. 26, 2012).  It appears that the Division of Enforcement’s attempts to enhance its subject matter expertise and to upgrade the analytical and technological tools used to sniff out fraud have contributed to these efforts, as recently demonstrated by an action brought by the SEC against six Chinese traders and a British Virgin Islands corporation trader alleged to have engaged in insider trading.  This article describes the factual allegations, causes of action and relief sought by the SEC in the Complaint, as well as the cautionary lessons to be learned by hedge fund managers from the Complaint.  See “Insider Trading – The Long View,” Hedge Fund Law Report, Vol. 4, No. 38 (Oct. 27, 2011).