SEC returns to its enforcement role

Trying to rebuild its reputation as the top securities cop, the SEC is pushing vigorously into areas it avoided under former chief Christopher Cox. On Tuesday it filed its first insider-trading case involving derivatives and The Wall Street Journal reports this morning that the agency is pursuing 150 cases that involve hedge funds.

Many of the cases involve credit-default swaps (CDSs), but other issues being investigated include how hedge funds value securities, fund managers' conflicts of interest, due-diligence failures, market manipulation and insider trading in all types of financial instruments.