Slightly less seriously, why not make live audio feeds from microphones placed at every lunch table in the Melbourne Club (and whatever the trendy lunch spot the rich and powerful are eating at in Sydney this week) available free to the public? Should even out the information gap nicely…

Regarding your suggestions:

1) Illiquidity cost (i.e. the inability to sell or buy shares when you want to) would be extraordinarily high in the periods when the market was closed. You would create a significant incentive for “grey” (i.e. non-standard or even illegal) markets, open at more convenient times, to develop. Insider trading would be an even greater problem in grey markets, which tend to be lightly regulated and thoroughly dominated by insiders.

2) see 1) above.

3) board members are almost always in possession of some price-sensitive information. The proposal is impractical, ambiguous and arbitrary.

4) we only hear about a small fraction of actual cases, and usually only where trading volumes are of such magnitude and/or direction that they are hard to ignore. I suspect, and I’ve heard it said many times, that most insider trading is small-scale and not detectible. Thus we are not going to know whether or not a company has been affected in most cases. It also penalises a listed company even when the incidence of insider trading is not its own fault.

Insider trading is rife, and it is a problem. Unfortunately I don’t have any better solutions - the punitive approach taken by ASIC pour encourager les autres seems to be the only option at the moment.

Few business decisions are as complex, risky and nerve-jangling as listing your company. The only transactions that come close are large mergers and acquisitions. This tends to make company owners and managers very risk-averse about the process.

It’s easy for Google to announce the intention to float and wait for the bids to roll in - it’s an Internet leviathan, an iconic brand with global appeal. It’s not so easy for Joe Bloggs Engineering Ltd to drum up the same level of frenzied interest. That’s why investment bankers and stockbrokers, the slutty midwives of capital markets, are paid to manage the process. It’s corrupt and byzantine, but it tends to work OK in most cases.

The nerve-jangling has more to do with submission to unbelievably onerous regulation and compliance - both formal (i.e. the stock exchange you list on, government regulators) and informal (i.e. the various predators circling your particularly floaty in the great ocean of capital) - and public ownership itself, i.e. losing total control of your own company.

On the topic of free trade I have had many a heated arguement with farming friends of the operation of markets. My position is stop squawking about the dairy industry - they can’t compete with Victoria or New Zealand then stiff cheese. Argentine beef - if it’s as good and cheaper then ditto.

They come back with a very valid responses - what has happened to the price of milk on the supermarket shelves? and they are paying more for qld & south american beef than local prices to pressure suppliers.

I say these are seperate issues that need to be addressed. The transparent and clean operation of markets is the basis of our well being (and the best chance we have of world peace btw) - crimes against it are serious. We must have faith in the operation of these markets.

Wealthy criminal business types like Vizard and many others are scum. More significantly they are dangerous scum. They should be treated as such by the courts and by the community.

An acquaintance sheepishly confessed to screaming obscenities at Alan Bond in a populated public beachfront. Hardly a mature act but as he said “well, fuck it”

But I think Fyodor’s main contention is the right one - listing, and finding buyers for a big chunk of equity are pretty complex processes. There may be a fair amount of bullshit and mystique peddled by the i-bankers about just how complex it is - particularly the bookbuild process - but nevertheless, it’s way beyond the capabilities of most companies to manage that process by themselves.

As for your other suggestions, Nicholas, I’m afraid that you might be right about them being a little naive. The whole purpose of the stock market is to provide constant liquidity. The economic consequences of insider trading (which, when it’s all said and done, are probably close to non-existant in most well-regulated markets) would be dwarfed by those of reduced liquidty. And the result would simply be the creation of new, less well regulated trading systems.

You may be right about the efficiency tradeoffs of lower liquidity - though I wouldn’t have thought that the third proposal would be all that disruptive to liquidity.

But I think you’d need to argue the idea that “new, less well regulated trading systems” would be created rather than just assume it. I would have thought that part of the point of the regulation to prevent trading during designated periods would be to criminalise, or at least render legally unenforcable arrangements that sought to effectively trade when a stop had been placed on trading.

On the alternative trading platform point, well, I guess that depends how draconian you want to make the regulatory regime. It’s one thing to say “the ASX must suspend trading in this stock in these circumstances”. It would be quite another to say “holders of this stock cannot dispose of it at all in these circumstances”. And if you’re not going to do that latter, then what are you going to do if a bunch of institutional investors get together and set up a wholesale market on which they can trade with other institutional investors when the ASX is closed. After all, if THEY are prepared to take the risk of trading in an unregulated market, what is the government’s interest in stopping them?

You would also need to consider the accelerating internationalisation of the capital markets. For example, many Australian companies have offshore listings. If trading is going to be regularly suspended on the ASX, why wouldn’t it just shift offshore, and why wouldn’t MORE Australian companies add offshore listings to ensure liquidity for their investors? Similarly, many institutional investors are now multinational and have no trouble shifting their holdings around the globe for various reasons, including regulatory.

But I think the key reason why no dramatic change is warranted is that it is just not that big a deal. It’s morally offensive, to be sure, and we can all cheer when some greedy fool gets caught, but it’s really only a big problem if it occurs at a level that drives away capital. I don’t see any evidence that the level at which it’s held by the current regime has any such effect.

Perhaps that is a dangerous assumption.

(I’m thinking aloud here. I wish it were not true. But the fact that Google may have left a lot of value on the table by not using investment bankers is sobering. If Google can’t do it, who can?)

The well-connected are usually also rich investors, and therefore “High-Value Clients” for the broker. They stump up money for IPOs on the understanding that they get looked after by the broker, i.e. get preferential allocation. The broker looks after them because: a) he has to find investors anyway; and b) he knows the HVC will keep coming back in future, for both primary (i.e. IPO) and secondary (i.e. normal, on-market) trading.

The result? Company obtains new investors; broker does his job and collects a fat wad of fees; broker’s clients make some easy money. Everybody happy, except the poor schmucks who think the market is fair and are disappointed not to get set in the IPO.

The world turns and another day begins.

“If you can’t spot the sucker, it’s you.”

“Where are the customers’ yachts?”

Or to paraphrase M. Fyodor, the sun churns and burns, and so does everything under it.