02/15/2012 07:56 pm ET

SEC Official: Common Wall St. Conversations Carry 'Troubling' Potential For Abuse

The Securities and Exchange Commission might be taking a closer look at common Wall Street practices that occupy an ethical gray area.

Certain routine conversations in the business world carry the potential for abuse, and can often be "troubling," David Rosenfeld, co-head of enforcement at the SEC's New York office, told a group of legal and financial practitioners earlier this month, according to Fox Business News. Some see the comments as a hint that the SEC may consider "expanding the definition of insider trading," according to the report

The SEC has been taking an aggressive stance against insider trading in recent months, with Chairman Mary Schapiro calling it a "problem of tremendous magnitude," and the agency filing more than 100 cases related to insider trading between 2010 and 2011.

Among the SEC's highest-profile cases ever was the successful prosecution of Raj Rajaratnam, a hedge fund billionaire who thanks to inside information made lucrative trades of Goldman Sachs and Google stock, among others.

At the same time, critics of the SEC say the agency's focus is misplaced, and that it has done little to punish the people and institutions that helped bring about the financial crisis of 2008 -- a near-meltdown of the national banking system in which insider trading played a relatively minor role.

For its part, the SEC says it has shifted its approach to financial-crisis prosecution cases in order to generate more charges that might stick. Meanwhile, the agency has pointed to its own record on insider-trading cases as proof that it is serious about stamping out financial misconduct.

SEC representatives have also complained that the agency simply doesn't get enough federal funding to be as effective as it could be. In 2011, the budget for the SEC was $1.185 billion.

A spokesman for the SEC has indicated that Rosenfeld's remarks this month don't necessarily point toward an expansion of the agency's definition of insider trading.