* Says many traders too young to remember Milken, Boesky
* Hawke in Boston: abuses rose with lack of high-profile cases since 1980s
By Ross Kerber
BOSTON, Feb 8 (Reuters) - Recent insider-trading prosecutions should serve as a warning to financial professionals too young to recall the crackdowns during the Reagan Era, a top Securities and Exchange Commission official said on Wednesday.
"These lessons have to be re-learned" by the many financial workers who were children in the 1980s, said Daniel Hawke, the head of the SEC's market abuse division, speaking at a Boston University event.
Hawke, 48 years old, said when he graduated from Boston University's law school in 1989 the best-known securities cases of the day involved insider-trading figures like Michael Milken and Ivan Boesky.
But for most of the next two decades the insider cases the SEC brought did not attract as much attention, with the result being that activities like exchanging illegal stock tips became more common.
Investigations since 2008, Hawke said, have shown 'that an alarming number of securities industry professionals were engaged in what we can call organized insider trading, where there were literally networks of people who were on each others' speed-dials, using disposable cellphones and other methods to communicate."
Now, Hawke said, "we want to instill apprehension in people who come into possession of nonpublic information," so they know it should not used for profit.
INSIDER TRADING CASES WIDEN
Hawke, who also heads the agency's Philadelphia regional office, leads an investigative division that has been at the center of a number of headline-grabbing prosecutions since the financial crisis.
Most noteable was the conviction last May of hedge fund multimillionaire Raj Rajaratnam, who in December began serving an 11-year-prison sentence, the longest on record for insider trading.
Another case involves Rajat Gupta, a former director of Goldman Sachs Group and Procter & Gamble, who the government alleges provided tips to Rajaratnam. Gupta has pled not guilty to charges dating to October.
Both cases are part of a probe that has also come to include the alleged improper sharing of confidential information on public companies, in some cases through what are termed "expert networks" used by hedge funds begun by thirty-somethings.
In his wide-ranging talk sponsored by Boston University's Center for Finance, Law & Policy, Hawke also described SEC efforts to modernize its computer systems and processes. That has helped to spot fraud and to analyze system problems such as the "Flash Crash" of 2010.
Hawke said he hoped the agency would be assigned more resources in the future and said movies like 1987's "Wall Street" often portray agency officials with equipment they can only wish for like motorboats and helicopters.
Also in the movies, Hawke said, "We carry guns, but we don't" in actuality. "You don't want us to," he added.