An alternative in which direction? Like, a nice hotel ... or hanging?

Insider trading is basically theft, only with no specific victim, and no broken windows; a very clean crime. Insider trading is stealing from other shareholders, which might include pension funds of HN readers.

Some discussion of impacts of insider trading here - http://money.howstuffworks.com/insider-trading3.htm

Like give the money back? To who? You're also creating a perverse incentive. Steal and not get caught, keep the money. Steal and get caught, give it back. Heads I win, tails you lose.

You could fine him treble damages or something, but if most of his income derived from insider trading, there's no way to apply the penalty.

It's a great punishment. Fines don't hurt the rich. They can afford to pay. Taking away their dignity, now that creates real deterrence.