The Securities and Exchange Commission will focus on financial instruments such as derivatives as it broadens a crackdown on insider trading by hedge funds, Robert Khuzami, the agency's enforcement director, said.

"The days of insider trading scrutiny being focused almost solely on the equity markets are now gone," Khuzami said Monday at a New York legal conference on hedge fund regulation.

After bringing its first insider trading case tied to credit default swaps in May, the SEC will "roll back the curtain on those markets and look at patterns across all markets," he said.

Billionaire Raj Rajaratnam and his Galleon Group in New York are among more than 20 people and firms the agency has sued since Oct. 16 in its probe of hedge funds.

The SEC brought its first insider trading case tied to credit default swaps in May, when it sued a Deutsche Bank AG salesman on claims he illegally fed information on a bond sale to a hedge fund money manager.

Prices on credit default swaps, which insure investors against bond defaults, have surged before corporate takeovers in recent years, fueling speculation that traders are abusing inside information.

The lawsuits, based partly on wiretaps and years of data mining, allege that hedge fund managers and traders obtained tips, sometimes in exchange for payment, on corporate deals and earnings that generated as much as $53 million in illegal profits.

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