U.S. financial regulators and federal prosecutors unveiled their biggest-ever insider case involving a hedge fund last week and similar cases may be announced in coming months, sources said on Monday.

A person familiar with the government's investigations told Reuters on Monday that U.S. regulators are pursuing significant insider trading cases involving financial professionals.

The person declined to say what types of companies are being targeted and when the investigations might be announced publicly.

While short of details, the statement appears to underscore the U.S. government's generally heightened interest in pursuing financial crimes extremely aggressively just months after two large Ponzi schemes were uncovered.

On Friday billionaire hedge fund manager Raj Rajaratnam, who founded Galleon Group in 1997, was charged with having used a network of company insiders to tip him off to information that netted $20 million in illegal profits between 2006 and 2009.

To date, this may be the biggest case the Securities and Exchange Commission has brought since facing harsh criticism for having failed to follow up on tips from outsiders and former employees that might have stopped two scams -- Bernard Madoff's $65 billion fraud and a smaller Ponzi scheme engineered by Allen Stanford.

If you've just gotten a black eye, you need to vindicate yourself and show that you are no longer your grandfather's Buick, said Ron Geffner, a former SEC enforcement attorney who is now a partner at law firm Sadis & Goldberg LLC.

Since earlier this year when Mary Schapiro replaced Christopher Cox as SEC Chairman a number of changes have been made to help root of financial crimes.

Perhaps most importantly, staff attorneys no longer need to get permission from commissioners for a formal order of investigation or to use subpoenas. That power has been delegated to top enforcement staff, which insiders said streamlines the investigations process and has helped speed up the work they are doing.

The SEC's internal changes are quickly being felt by managers in the $1.4 trillion hedge fund industry.

Several hedge fund managers said they now expect to have SEC lawyers knock on their doors more routinely to review certain documents. Since 2006 when a landmark case reversed the SEC's rule to have hedge funds register with the regulator, the industry has managed to stay largely out of the SEC's sight.

They are paying extra attention to everything right now, said Ian Roffman, a former SEC attorney who is now a partner at Nutter McClennen & Fish, adding we are in a period of very heightened enforcement activity.

Roffman and other attorneys agree that the number of enforcement actions will go up this year and that the number of high-profile cases will also rise.

Several weeks ago the SEC told hedge fund manager Arthur Samberg that it plans to file civil insider trading charges against him and Pequot Capital Management, the firm he shut down in May after the government reopened its investigation into the matter.

Indeed a report from risk consulting firm Kroll released on Monday found that increasing twice as fast in financial services as in other sectors with North America particularly hard hit by the financial crisis.

Traditionally insider trading case make up roughly 7 percent of enforcement cases and that number has been largely steady over the years.

(Reporting by Svea Herbst-Bayliss and Rachelle Younglai)

Investment Insider trading Raj Rajaratnam