The appeals court reasoned that given that the tribunal can require penalties of up to three times the profit made or lost as a result of insider trading, it is imposing penalties that are as burdensome as a criminal court. If that is correct, a person appearing before the Tribunal should be entitled to the same protections as any person investigated for, or charged with, a criminal offence û in particular, the right of silence, explains Tim Mak, a partner at Herbert Smith law firm in Hong Kong.
Herbert Smith also pointed out in an e-bulletin on the hearing that: ôThis ruling could affect other cases which are currently before, or are due before, the Insider Dealing Tribunal, but may not affect pending cases before the new Market Misconduct Tribunal, which does not have an equivalent 'fining' powerö.
To date, the Insider Dealing Tribunal has relied upon evidence collected by the Securities and Futures Commission, which has been able to compel interviewees to answer questions. Such compulsorily obtained evidence would of course be the most effective way to prove insider trading.
ItÆs difficult, of course, to imagine a person who in the future is told, ôYou have the right to remain silentö, to go on and say, ôWell, yes, I did some insider trading.ö As a result, lawyers point out, that proving such cases going forward is going to be more difficult.
Clearly itÆs been difficult enough to prove thus far: The Insider Dealing Tribunal was established in 1991 and since then there have been about 20 cases (several more reports) that it has heard.
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