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There was a time in Britain when even senior representatives of the financial services industry were prepared to be quoted in the press as expressing doubts as to whether there was anything intrinsically wrong with directors and other corporate insiders taking advantage of their better knowledge about their companies in their own investment dealings. Indeed, some even went so far as to say that this was both proper and natural. True it is that, in Britain or for that much in continental Europe, there are few, even among the groves of academia, that would have advanced the theories justifying insider dealing that Professor Henry Manne so clearly articulated in ‘Insider Trading and the Stock Market’. Nonetheless, in what was then the leading book on the law and practice of the stock market, the authors, a leading Queen's Counsel and an eminent stockbroker, expressed the view in 1972 that a stockbroker who learnt even privileged information should not allow this to operate to the detriment of his client. Having said this, Sir Winston Churchill complained that it was defamatory to assert that advantage had been taken of ‘inside information’ during the so‐called Marconi scandal in 1911, and there are comments in a report to the House of Commons by special commissioners as early as November 1696 roundly criticising promoters of over‐valued stock selling out, in the entrepreneurial fashion eloquently advocated by Professor Manne, on the basis of their privileged knowledge and position. Thus, discussion of the pros and cons of insider dealing, at least in Britain, has tended to be emotional rather than based on economic or even pseudo‐economic analysis of empirical data. Even the surveys that have been conducted on attitudes to the practice would hardly impress a statistician.

Enforcement as a concept imports compulsion to comply with a particular norm. Of course, the nature of enforcement might vary considerably with the norm in question or society within which action is desired. Professor Gower, in his ‘Review of Investor Protection’, expressed the view that a rule that could not be or was not enforced brought the system, within which that rule was supposed to operate, into disrepute. Whether this is true or not may be a matter for debate. Most systems of control envisage rules that in practical terms are unenforceable, but that are expected to have a normative or educational effect. Such functions, in the context of securities regulation, may be thought to be of some significance. Thus, the fact that simply because a rule cannot either in its terms or in practice be sanctioned by a predictable and determinate action intended to promote compliance, does not necessarily undermine that rule let alone the system within which it exists. To assume without more that a rule that cannot be enforced is not a legal rule, or to be precise a rule of law, while no doubt appealing enough to the positivist school of jurisprudence, is simplistic and outdated. Furthermore, in the context of the sort of economic regulation that we are discussing, whether a rule is characterised as one of law or not may or may not have significance. While there is a problem with determining the appropriate degree of interface between rules bearing differing qualities, purely in terms of achieving a defined regulatory objective it might well be that a rule which is not law in the formal sense of having been promulgated by an authority with legislative power, promotes a satisfactory degree of compliance. Therefore, many of the rules that pertained prior to the creation of the regime of regulation under the Financial Services Act 1986 were essentially non‐legal in the sense that they did not carry determinate sanctions ordained by a legal process consequent upon a violation and were not promulgated by an authority with legislative power. However, to dismiss them because they were unenforceable at law would give a very false picture of the efficacy of what was for many years a satisfactory regulatory structure. Even today, although the interrelationships of legal and non‐legal rules is very much more complex, it is still the case that significant areas of regulation have been left to non‐legal authorities.

When the time comes to look back at the last two decades of the 20th century, a future historian would be forgiven for thinking we were almost obsessed with organised crime, corruption and money laundering. Of course, when one considers the ignominious fall from favour of so many world leaders, in circumstances where serious corruption was at least alleged, if not self‐evident, the exposure of rampant financial malpractice in intergovernmental organisations, the penetration of entire economic and political structures by, for what of a better notion, we describe as organised crime, then perhaps our historian's impression might not be too far from the truth. Although it is possible to find the odd comment in international meetings, about the serious implications of economic crime and the like, before the 1980s, these a few and far between. Most are related to complaints from developing countries about the unwillingness of developed countries to assist in the enforcement of exchange control laws. In fact, it was not until November 1980 that the Commonwealth, an organisation or rather association of states whose justification has increasingly been based on its ability to recognise and address problems related to small and relatively fragile economies, began to concern itself, at governmental level, with the implications of what appeared to be a growth in serious economic abuse. At the Commonwealth Law Ministers' Meeting in Barbados in that year, the ministers accepted the recommendations of a report, commissioned a year earlier by the then Director of the Commonwealth Secretariat's Legal Division, Mr Kutlu Fuad, and written by the present author, which led to the instigation of a Commonwealth programme against serious economic crime. It is interesting to note that certain Commonwealth governments had expressed concern during the 1970s not so much about abusive conduct on the part of conventional criminals, but on the part of those seeking to ‘bust’ the economic sanctions that had been imposed on Rhodesia and later South Africa. Indeed, it was claimed by some that, for example, South Africa was deliberately attempting to destabilise the economies of the ‘front‐line states’ through a programme of economic sabotage and crime. In those days, there was little talk, even in such organisations as ICPO‐Interpol, about the threat of organised crime. Terrorism, whether by individuals or by state agencies, was then considered to be a matter almost beyond the remit of traditional law enforcement agencies. It was much later that most came to recognise that organised crime and terrorist organisations may well be one and the same.

Some have argued that organised crime is a problem of the last quarter of the 20th century and in the case of most states is a new phenomenon. Of course, so much depends upon what is meant by organised crime. Groups of individuals formed and managed to perpetrate acts against the law are nothing new. Nor is it novel that the primary motivation of such enterprises is economic gain — spurred on by ‘plain old‐fashioned’ greed and corruption. Banditry, smuggling, racketeering and piracy were just as much a problem for the praetors and the vigils of ancient Rome as they are today for the Italian authorities. What has changed is the criminals' ability to operate beyond the reach of the domestic legal system and, therefore, be able to conduct an enterprise in crime that is not so amenable to the traditional criminal justice system and its agents. Of course, in truth, thinking criminals have always sought to place themselves beyond the reach of the law and it was not just a matter of having a faster horse. Corruption of officials and the patronage of powerful individuals whose interests, for whatever reason, might be at variance with those of the state are tried and tested tools. It has always been recognised that even if as a matter of theory jurisdiction was unfettered, the practicalities are such as to render enforcement parochial. Thus, when Henry II of England was asked towards the end of the 12th century how far his writ ran, he responded ‘as far as my arrows reach’. While developments in ballistic technology might render this a relatively useful approach to dealing with the international criminal, in the vast majority of cases the criminal law in its application, or at least administration, will be confined within domestic borders. Developments in technology, communication, travel and the liberalisation of movement, whether of persons, things or wealth, have all combined to give the criminal enterprise of today the same ability as any other business to move from one jurisdiction to another, or involve in a single act two or more different jurisdictions.

In recent years the divide between areas of law, which have hitherto been perceived, in most systems of jurisprudence, as relatively and mutually distinct, has narrowed and in some instances all but disappeared. This tendency is perhaps no more dramatically illustrated than in, which for a better description, might be termed the area of financial regulation. When the present author started teaching a course in the University of Cambridge on financial services regulation in 1979, the perception among those of his colleagues who regarded such things, was that this formed part of the corpus of corporate law. Of course, this analysis is only partly justified, and beyond the area of corporate finance law is misconceived. On the other hand, the commercial lawyers, who — at least in Cambridge, have been regarded or perhaps more accurately tolerated, as being a little more academically respectable than pure corporate lawyers, were distinctly unsympathetic to the notion that financial services law is in part akin to banking law and therefore a subject more suited to mercantile law. Given the author's predilection to weigh more heavily those aspects of the law that are protective of society, rather than facilitative of enterprise, it is not surprising that he ventured more and more into the realm of prohibitions, sanctions and even the criminal law. Take for example, the abuse of price sensitive information obtained by those in a confidential position, by virtue of that privileged relationship, to trade on the basis of that information in corporate securities — in other words, insider dealing. Is this properly regarded as a matter for the traditional law relating to directors and officers, and thus, company law, or given the fact that most countries today seek to curb such activity on the basis that it harms confidence in the integrity of public markets, a matter of public, and in particular criminal law? While such a debate may appear somewhat academic, even if it does result in the demarcation of courses and the like, it can and occasionally does have a very real practical significance. For example, in some jurisdictions, such as the USA, the Federal Legislature is competent to legislate on matters pertaining to international trade and finance, and thus the protection of the markets, but not matters of traditional company law. On the other hand, it has been contended in jurisdictions such as Canada that given the uncertainty attaching to the Federal Legislature's competence in regard to the financial markets, it is better to consider insider abuse as a matter of company law. Similar issues arise in the context of the competence of specific organs of the European Union and, of course, are not uncommon in the demarcation of competence between domestic agencies, whether of law reform or enforcement.

The acquisition of and control over wealth is the motivation for most serious crimes involving premeditation. This is all the more so when the criminal activity resembles an enterprise which inevitably requires capital to operate and lubricate its aspirations. Money, or rather wealth, in its disposable form, is therefore not only the goal of criminal enterprises but the life blood of the enterprise. Therefore until the profits of crime are taken away from subversive and criminal factions, there is little chance of effectively discouraging criminal and abusive conduct which produces great wealth or, through its profits, allows power and prestige to be acquired. As soon as the state devises methods for the tracing and seizure of such funds, there is an obvious and compelling incentive for the criminal to hide the source of his ill‐gotten gains — in other words to engage in money laundering.