There's an interesting discussion of insider dealing in the City in the FT today. Take this as some indication of the flavour:

Many have found the FSA's most recent study into informed trading laughable after it showed that less than a quarter of takeover announcements in 2005 were preceded by share price movements that indicated possible insider trading.

"It is more like less than a quarter of deals don't leak," one merger arbitrageur at a mid-sized City firm points out. "The FSA is a toothless, white elephant. No one thinks they are going to get caught, and if they do, the worst that can happen is a fine," he adds.

I'm with those who argue that the FSA's non-confrontational approach is wrong. as one trader put it:

If the threat of prison sentences were made greater, the cost of going to jail would outweigh the cost of making money on an inside trade.

One of the biggest fears for any middle-class male working in the City is jail. Take that away and an inside trade becomes just an economic calculation.

Sad, but I think it's true. There has to be an iron fist in the velvet glove or these things just won't work. Which is, incidentally, why I do hope the Revenue will be prosecuting a selected few on offshore.