Making Them Pay (and Confess)
By nominating Ms. White, a former federal prosecutor, to head the S.E.C. last week, President Obama appeared to send a message that Washington was finally going to get tough with financial wrongdoers. Tough enforcement has been pretty much AWOL on his watch. Maybe Ms. White can change that with a new, aggressive approach.
Here’s a good place to start: The S.E.C. routinely lets companies and individuals settle cases against them without admitting or denying its findings. This lets bad actors pretend that they’ve done nothing wrong. It also makes it harder for investors to mount successful lawsuits against them.
Regulators say this is the best approach. The practice, they contend, helps the S.E.C. and other agencies avoid costly, time-consuming litigation that would tax already-stretched resources. Quick settlements, rather than long trials, mean victims get restitution faster. And there’s always the possibility that the S.E.C. might lose in court.
But these no-admission settlements can be little more than a wrist slap — and certainly do not qualify as punishment. Most financial penalties end up being paid for by the company’s shareholders or its insurance policies. That’s not much of a deterrent.
Here is another reason the S.E.C. should junk these arrangements: other prosecutors have already done so. Preet Bharara, the United States attorney for the Southern District of New York — hired by Ms. White in 2000 when she ran that office — has made it a priority to require admissions from defendants in civil fraud cases brought by his prosecutors
http://www.nytimes.com/2013/01/27/business/at-the-sec-a-chance-to-get-tougher-on-settlements.html
= new reply since forum marked as read
