There’s no doubt that the potential for gain “has soared,” Robert S. Khuzami, head of enforcement at the S.E.C., told me, and not because there are more takeovers and other market-moving events to trade on. “That’s a big change from the 1980s and ’90s. Hedge funds can take massive positions, use short-selling and derivatives, and employ trading techniques that aren’t transparent, and make huge amounts of money on small fluctuations on price. They don’t need to hit a home run on a $20 pop on a takeover announcement. These bets may be bunts and singles, but they get to the same place.”

Even at lower rungs of the hedge fund world, the potential gains have shot up. Mathew Martoma, a former SAC trader who was accused last month of using secret information to help SAC gain profits, was paid a $9.4 million bonus in 2008, when he was just 34. At the same time, the cost of failure can be catastrophic. When he failed to replicate that kind of information, he was fired a little more than a year later. (Mr. Martoma pleaded not guilty to the charge, and, through his lawyer, has denied any wrongdoing.)

The pressure to get an “edge,” as hedge fund traders often put it, has never been greater. “There’s a cruciblelike intensity of competition now that didn’t exist at the time of Boesky,” Mr. Zabel told me. “With hedge funds, there’s a lot of capital, and they’re competing ruthlessly. You have to be better every quarter or you’re not going to exist. Add the tremendous incentive of great wealth, and it’s not surprising that some people lack the moral fiber to resist that kind of pressure.”

Even as the potential rewards have soared, the nature of today’s trading — the bunts and singles, as Mr. Khuzami put it — has made enforcement more difficult, leading to what seems to have been a perception of less risk of getting caught. In the wake of the Milken-Boesky era, the government has become sophisticated at monitoring major market-moving events like takeover announcements, to the point that insider trading on major corporate news has become relatively rare (though just this week the S.E.C. charged an old-fashioned insider trading ring based on leaks about proposed mergers and acquisitions).

Modern technology has also rendered obsolete the use of suitcases of cash, secret passwords and other subterfuges I described in “Den of Thieves,” my 1991 book about Mr. Milken, Mr. Boesky and insider trading in the 1980s. “In the 1980s, you had to meet someone, or have lunch or exchange information in ways that were slower and more visible,” Mr. Zabel said. “Now, you can have only the glow of your computer screen on your face and you can scoop up all sorts of valuable information from all over the country or even the world. If you get even little bits, you can trade on a daily or hourly basis on micromovements.”

But technology has cut both ways. Although some critics say the S.E.C.’s expertise has lagged advances in areas like high-frequency trading, the enforcement division has made progress in monitoring suspicious trading. “We’ve created databases to see who is trading in tandem, even if you know nothing about an event,” Mr. Khuzami said. “It’s a trader-based approach, not an issuer-based approach. These trading patterns are the first clue to what might be insider trading rings. You then have to do the real detective work, pulling phone records and e-mails and using other techniques to uncover the links. ”