Quite obviously, the first question to address is whether the problem lies with the car or the driver and we addressed this question long ago. Cars are legal. Speeding is illegal.

Similarly, with this problem of stock market manipulation we can either ban stocks, which would certainly stop the problem instantly, or we can pass laws against manipulation. We have first to decide whether the stock or the stock manipulator is the problem and this we have already done. Stocks are legal. Manipulation is illegal.

This makes such absolute and obvious sense that you may wonder why we have suddenly come to question it. Whence comes the rebirth of this strange notion that the problem lies in the stocks? I can suggest an answer to that question of course. It lies in the discovery that we may have made manipulation of stocks illegal but we have found this law difficult to enforce.

Perhaps it is true that manipulators have found safety in numbers with all the small stocks we now have listed on the market but where they have really found safety is in the means through which we police the market. The big problem here is that the stock exchange and the Securities and Futures Commission have never settled who is responsible for what when it comes to policing.

They say they have, of course. They have even written a big paper on it. But I defy anyone to read that paper and make sense of it. I cannot. You would have thought it obvious that the exchange should have given up any regulatory function when it became a listed stock itself. Most people think so. The exchange does not want to give up any of its authority, however, and the SFC is not strong enough to make it do so.

But while the exchange wants the authority it does not seem to want the actual job. Time and again when it catches a corporate director ripping off the small shareholders it administers only the lightest of taps across the wrist as a punishment - a notice of censure or criticism or something like that. No one goes to prison, no one is fined, no one is banned from being a director.

Should anyone be surprised that this creates a fertile ground for market manipulation? The real surprise is this strange remedy the exchange now proposes to address the problem. It reminds me of the farmer whose cat sneaked into the dairy. His solution was to take all the milk out and keep the cat in.

Laugh if you want but you laugh at yourself. It is exactly what we are doing. There is nothing inherently wrong with penny stocks and no reason to treat them any differently from big stocks if their accounts are audited and their directors comply with the law. They, in fact, provide us a valuable service. They are a means for small entrepreneurs to become mainstays of our economy and we should leave them alone.

The disgrace, boss, lies entirely in the confusion and negligence with which we enforce our laws against manipulation.