INSIDER trading cases are like London buses: you can wait for ages without seeing any at all. And then a whole bunch will come along at the same time.
Last week, the UK Financial Services Authority (FSA) pursued two high-profile investigations into alleged insider dealing rings. Last month, prosecutors secured a rare prison sentence against a stockbroker.
Why now? For years, traders in the financial markets stood more risk of getting struck by lightning on the golf course than they did of being arrested for swapping a few share tips on the same fairways.
In reality, the regulators are responding to a public mood that has turned hostile to bankers. And they are covering up their own inadequacies. Show trials are just a distraction from far worse problems.
The real wrongdoers in the City of London are the politicians and regulators who allowed the country to be virtually bankrupted by an overblown, risk-hungry banking industry. A few brokers and hedge fund managers getting an inside track on which stocks or bonds might be up or down tomorrow won't make much difference.
The crackdown on insider trading by UK regulators is harsh enough to make everyone in the markets nervous. Last week, the financial district was rocked by dramatic action. In one set of raids, executives of Exane BNP Paribas, Deutsche Bank and hedge fund Moore Capital Management were arrested on suspicion of insider trading.
In a separate investigation, as many as 11 people may face charges arising out of a probe that started at the London printers working for UBS and JPMorgan Chase.
Last month, Christian Littlewood, a former banker at Shore Capital Group and Dresdner Kleinwort, was charged with insider trading, along with his wife. A week before that, the agency won an insider trading case against Malcolm Calvert, a former partner at JPMorgan's Cazenove unit.
So why is the City witnessing this sudden increase in law enforcement for insider traders? For years, insider trading wasn't just a largely victimless crime, as many opponents of the laws have argued, it was also mostly unenforced.
Of course, there may be some simple reasons. The law is the law, whatever you may think of it, and the regulator's job is to identify anyone who breaks it. If they have decided to devote more time and resources to making sure the rules are obeyed, then they are to be commended.
And the techniques of surveillance are now a lot more sophisticated. Cellphones and e-mails leave an electronic record of whom we talk to, and when.
When tips were swapped in the barber shop, it was very hard to prove who said what to whom. With e-mails and cellphone calls, you can prove it precisely. With that kind of evidence, it is easier to build a case that will stand up in court.
But, surely, there is something more troubling at work.
After the credit crunch, the public mood turned decisively against the financial markets and the people who work in them.
The regulators may be getting tougher on financial crime because they sense the public wants to see bankers, brokers and hedge fund managers in prison. Or perhaps the agency is trying to prove its mettle to the Conservative Party, which plans to abolish the FSA if David Cameron wins power in the upcoming general election.
In any case, the current witch-hunt is overdone. Making a few pounds by trading a stock ahead of a company announcement is much less damaging than inflating a balance sheet, loading it up with subprime debts, and then getting taxpayers to pay billions to the bankers who created the mess.
And who is more guilty of misconduct - a few fund managers who get ahead of the game, or the regulators who failed to notice that financial institutions were built on foundations so flimsy that they collapsed as soon as the market turned down?
The insider trading prosecutions give the appearance of a crackdown, while leaving the system intact.
If people are going to be punished for the financial crisis of the last few years, then we should focus on the real culprits, not just a few scapegoats. - Bloomberg