An attorney who represents several hedge funds contacted by regulators says the SEC is "looking at bringing a series of enforcement actions involving big PIPEs players." The attorney, who didn't want to be identified, says none of his hedge fund clients has received a Wells Notice from the SEC. A regulatory source who also did not want to be identified says the "SEC is very interested in this area." The source said he "expects some more cases" in the near future. One notable hedge fund that has drawn scrutiny from regulators over the past several months is HBK Investments, a big $7 billion Dallas-based hedge fund, sources say. The multistrategy fund is perennially one of the biggest investors in PIPEs. During the first six months of this year, HBK sank $53 million into six different transactions. One particular PIPE deal involving HBK that regulators have looked into is a $3.4 million financing transaction for Plano, Texas outsourcing firm PFSweb ( PFSW), say people familiar with the deal. HBK was the largest investor in the 2003 financing. Jon Mosle, HBK's general counsel, declined to comment, noting the hedge fund has a policy of not talking to the press. PFSweb CFO Thomas Madden also declined to comment. To date, most of what is publicly known about the investigation has revolved around a 4-year-old PIPE deal for Compudyne ( CDCY), a small security services firm. In May, the SEC and the NASD reached a $1.45 million settlement with former hedge fund manager Hilary Shane, charging her with fraud and insider trading. They charged Shane with illegally profiting from a series of short trades she made in Compudyne's stock. As an investor in the PIPE, regulators say, Shane had advance knowledge that the private placement would price Compudyne's shares at a significant discount to the going market price. And relying on that inside information, the regulators say, she made improper short bets against the company's stock. They also allege Shane used some of the discounted shares she obtained in the PIPE to close out her short positions.