The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance

by Ron Chernow

In the past, British authorities had taken a relaxed attitude toward insider trading, which wasn’t even a criminal offense until 1980. This laissez-faire attitude was incompatible with the new conglomerates encouraged by Big Bang. There were now fears that traders would abuse information from their mergers departments. In global financial markets, there was also a need for higher universal standards—a particular concern of the Thatcher government in its quest to insure the City’s worldwide standing. Right before Big Bang, Morgan Grenfell distributed a little in-house manual in which it stated that any staff purchases of shares had to be channeled through Morgan Grenfell’s own brokers. The penalty for violating the rule was summary dismissal.