WHEN DOES A stock tip become a social evil? Look no further than Martha Stewart to typify debate on the topic, as the fallen salad icon faces jail for obstructing regulators attempting to investigate insider trades.
With no physical 'victim' in her wake, even the hardiest of observers might have a degree of empathy, given that the perceived crime became peripheral to the media circus that followed.
Stewart was a stockbroker in a former life. She knew the rules of the game. The stock was not sold to pay expensive school fees or meet a down payment on a mortgage. The chance was there to avoid a loss, and it was taken.
Likewise, pick an insider dealing report at random from Hong Kong's list over the past 13 years and it is hard to find an example that is not bereft of extenuating circumstances.
There is no mitigation that tugs at the heart strings. It is a premeditated act: the chance was there to make a fast buck, and it was taken.
The market may debate the merits of throwing culprits in jail, but there can be no doubt this is an illicit trade premised on greed. For Hong Kong, hitting insider dealers where it really hurts - in the pocket - has in many ways been the most fitting punishment.
Unfortunately, it has been somewhat of a hollow one. Of $221 million due in penalties from insider dealers in Hong Kong, just $87 million has been collected. This leaves a $132 million hole in what is otherwise a success story - of the 14 inquiries conducted by the tribunal since it was set up in 1991, 12 have resulted in financial orders against individuals.
The system has been the envy of other jurisdictions which struggle with criminal burdens of proof to convict insider dealers. Unfortunately, as the rest of the world moves in Hong Kong's direction, we have now attached criminal sanctions to insider trading. The conviction rate is expected to be decidedly thin.
So it is a shame to see the final days of the Insider Dealing Tribunal end in a financial anti-climax. It should be stressed that the issue of enforcement is in the hands of the Department of Justice, not the Insider Dealing Tribunal itself.
The department has said it has taken legal steps to recoup money from the individuals involved, but has declined to name these people, or point to actual litigation or bankruptcy proceedings.
It has indirectly noted that at least one individual concerned has since passed away, others may be bankrupt already, or have left the jurisdiction.
Reading between the lines, then, it seems insider dealers are no strangers to financial adversity and the public coffers will just have to do without the cash.
It just doesn't quite fit with the demographics, however, the underlying wealth of many of these insider dealers being somewhat downplayed.
These are multimillion-dollar trades that took place, often among leading executives of publicly listed companies. They were obviously not short of a few million to punt in the market.
The insider dealing tribunal is moreover not operating in a bubble. At least one report notes 'nothing is served by imposing financial penalties which are beyond the persons' means to pay'.
Steps are taken to gauge the equity of these individuals. This would include the apartments in New York, stakeholdings in major corporations, the company car, the annual bonus - and, of course, the money they made or loss they avoided from the share sale in question.
This only covers the equity the culprits are upfront about. The lawyers they enlisted to fight their corner did not come cheap, either.
But if the Department of Justice is to plead poverty on the part of the insider dealers, it needs to give details.
So far the line from the department has been that it does not comment on individual cases, a standard practice amid privacy concerns.
These individuals have, however, been dealt with in a very public context. Their deeds are well documented and the fines due are a matter of public record. Any writ filed to claw back the cash would be lodged in the High Court. Bankruptcy proceedings likewise are commenced by way of writ, which can also be obtained from public records.
This acute concern over an individual's right to privacy moreover seems almost ironic given the new direction of insider dealing regulation in Hong Kong.
While the serious cases will go through the courts, the civil route will be in the hands of the Market Misconduct Tribunal.
Gone are the hefty fines - the tribunal will have no such powers.
The punishment likely to be incurred for illicit trades is less financially oppressive, and is more behavioural in nature. It may be a cold shoulder. It may be a cease and desist order.
The theme is very patently one of 'name and shame'. The future is not very private.