Anecdote has it that there is a well-connected businessman who will not get out of bed for anything less than US$10 million in a hot public offering.
While tongues wag over the 20 per cent profit he pockets for flipping the shares at a premium before the stock debut, attempts to establish how he managed to bag such a large tranche of the offer in the first place involve a descent into muggy shades of grey.
The high-profile trial of former Wall Street titan Frank Quattrone defined the parameters clearly in the United States: showing favour to clients in return for investment banking business is not on, even if the only charge you can pin on suspects is obstruction of justice.
The Credit Suisse First Boston banker faces a jail term after being found guilty in May of blocking federal probes into his firm's allocation of shares in hot initial public offerings. The bank separately paid US$100 million to settle civil charges that brokers engaged in a firm-wide scheme to share IPO profits with hedge funds.
In Hong Kong, the regulatory picture is more opaque. One of the few probes to delve into the allocation process has fallen into the hands of the anti-graft body, not securities regulators. The suggestion is that preferential treatment, tolerated in business circles, is going to be tested against wider corruption law.
It emerged in May that the Independent Commission Against Corruption (ICAC) and the mainland's Central Commission for Discipline Inspection were launching separate investigations into claims that friends and relatives of China Life Insurance executives received 'preferential treatment' in subscribing to the company's US$3.5 billion IPO in December.