A confluence of factors – including, most notably, the crackdown on insider trading by Preet Bharara when he served as the U.S. Attorney for the Southern District of New York – has led to enhanced scrutiny by regulators of actions at hedge fund managers that may constitute insider trading. In light of this ongoing regulatory scrutiny, fund managers must routinely review their policies, practices and procedures designed to prevent insider trading. See “Key Elements of a Hedge Fund Manager’s Insider Trading Policies and Procedures” (Oct. 29, 2009). Beyond having a best-of-breed insider trading policy, hedge fund managers must also think about how they would respond to suspicion or discovery of insider trading by an employee or principal of the manager. Within hedge fund management firms, the general counsel (GC) and chief compliance officer (CCO) are on the front lines of investigation, discovery and response. Accordingly, this article offers guidance and a review of best practices with respect to what a fund manager’s GC or CCO should do in the event of suspicion or discovery of insider trading. See our four-part series “How Can Hedge Fund Managers Structure, Implement and Enforce Information Barriers to Mitigate Insider Trading Risk Without Impairing Securities Trading?”: Part One (Jan. 16, 2014); Part Two (Jan. 23, 2014); Part Three (Jan. 30. 2014); and Part Four (Feb. 6, 2014).