The background here is that the SEC is currently seeking the power[0] to impose fines without judicial review: Even as Judge Jed S. Rakoff of Federal Distric

The background here is that the SEC is currently seeking the power[0] to impose fines without judicial review: Even as Judge Jed S. Rakoff of Federal District Court in Manhattan rejected the Securities and Exchange Commission‘s proposed settlement with Citigroup because he did not find it in the public interest, the agency’s chairwoman, Mary S. Schapiro, sought to enhance the S.E.C.’s authority to impose higher financial penalties to deter securities violations. An important part of her proposal would allow the S.E.C. to seek the increased penalties in administrative proceedings, a move that may allow the commission to avoid having to pursue its cases in federal courts in the future, skirting the kind of scrutiny Judge Rakoff applied. This article is a press hit[1] by the SEC's PR folk[2] which encourages people to call for stiffer penalties against those evil firms. Bingo, SEC gets a powerup. The "grassroots" outcry means they can now just ticket & fine companies without the meddling checks and balances of the federal courts system. The SEC's fines have about as much to do with preventing a financial meltdown as local police traffic fines have to do with preventing a murder. It's just safety theater. That is, everyone is familiar with the local/state government phenomenon of cops who ticket to make quota at the end of the month. Whether you are "breaking the law" today depends in large part on whether state/local government needs to make money off you. Tickets for expired registration are profit centers, robbery investigations are cost centers. The federal government is subject to many of the same dynamics, except that it isn't called on the carpet in the same way because federal agencies can intimidate those with knowledge of the situation into silence. Once in a while data comes out on the corruption and malfeasance of (e.g.) FDA[3] or EPA[4] or SEC[5] bureaucrats, but for the most part they have the guns so they are dishing out the punishment. The NYT's role in all this is to act as stenographer. There is no summary of how much the SEC sought to earn in fines from pursuing these prosecutions, nor how many of them were overturned or thrown out of court. [0] http://dealbook.nytimes.com/2011/12/05/s-e-c-seeks-more-power-but-does-it-need-it/ http://dealbook.nytimes.com/2011/12/05/s-e-c-seeks-more-powe... [1] http://www.paulgraham.com/submarine.html http://www.paulgraham.com/submarine.html [2] http://www.sec.gov/news/press.shtml http://www.sec.gov/news/press.shtml [3] http://www.washingtonpost.com/business/economy/fda-chemist-pleads-guilty-to-insider-trading/2011/10/18/gIQA6wwyuL_story.html http://www.washingtonpost.com/business/economy/fda-chemist-p... [4] http://epw.senate.gov/public/index.cfm?FuseAction=Minority.Blogs&ContentRecord_id=2197064b-802a-23ad-49a0-d86c2080b4f8 http://epw.senate.gov/public/index.cfm?FuseAction=Minority.B... [5] http://abcnews.go.com/GMA/sec-pornography-employees-spent-hours-surfing-porn-sites/story?id=10452544 http://abcnews.go.com/GMA/sec-pornography-employees-spent-ho...