There is nothing surprising about this FSA study found strong evidence that about a fifth of results announcements and a third of takeovers were preceded by insider trading. My own experience, the scale of the opportunities, and the number and nature of the people involved all lead to the expectation that it happends.

I remember one company I used to cover, whose shares would move before announcements often enough that I came to expect it. It is obvious that there were many others who were being less obvious.

As FT Alphaville comments, the FSA is still taking a fairly soft line on insider trading. Their own study suggests that the fines imposed are simply not a sufficient deterrent, given the huge scale of possible gains.

There also too many people who have sensitive information: many people within a company, external investor relations and PR people, and, in the case of a takeover, a large number of professional advisers.

Without wishing to perpetuate the stereotype of investment bankers as being simply greedy, I do think they represent a particular danger:

• They are usually highly motivated by money.
• They have the knowledge of finance to cover their tracks.
• They have the contacts (often in the same office) to leak information to those best placed to use it.