Boom markets and illicit trading always go together. So it's no surprise that there are signs of illicit trading ahead of company announcements, as revealed by The New York Times.

The paper reports that there was suspicious or abnormal trading in the Securities of 41 per cent of companies ahead of their announcement of a deal.

For me personally, this rang alarm bells. About 12 months ago, I was part of an investigative team that found the same sort of thing was going on in the Australian market.

There are some obvious reasons why insider trading is part of the market.

Insiders claim that insider trading, the never-ending chase for special tips that put some traders ahead of the pack, is an inexorable part of the way the market operates. Brokers and lawyers have told me that secret deals are a fact of market life, regardless of how tough the laws are.

Part of the problem is that information is part of the job for analysts and brokers, and getting that information is not illegal. Where is the dividing line between competitive information and insider trading?

And that's the problem because the system is purportedly designed to create a market with a level playing field, one that is open to all comers, from institutions to small investors.

Still, don't expect much action from the regulators on this. The Securities and Exchange Commission, which is struggling under budget constraints and job cuts, is lagging behind on enforcement activity, reports USA Today.

According to figures cited in that report, enforcement actions for insider trading have been heading south since 2002!