The Toothless Poodles

[Desperadoe]

Elizabeth MacDonald, 09.16.03, 4:49 PM ET

NEW YORK - When it comes to the weak-kneed response to corporate scandals, crime, unfortunately, really does pay.

Over the last year or so, we've seen big-name investment firms and companies involved in some big scandals, the latest being Canary Capital Management for improperly trading mutual funds. Now New York State Attorney General Eliot Spitzer is looking into widening the dragnet to include more companies.

But when you consider how much these companies are worth, the type of punishment meted out and who in reality is actually paying the bills, then what William O. Douglas, former Supreme Court justice and former chairman of the U.S. Securities and Exchange Commission, liked to say is sadly no longer true, that the SEC down on Wall Street is the shotgun behind the door.

Today it's more like a water pistol.

We've seen a delightful bit of throat clearing on Wall Street, with major firms forking over a record $1.4 billion in fines for helping to hype the bubble while in the process helping themselves to duped shareholders' money. But other than Spitzer, the enforcement apparatus that should have stopped these problems to begin with is nowhere to be found. Shareholders have to make do with refereeing and camera-jockeying after the fact.<snip>

http://www.forbes.com/2003/09/16/cz_em_0916wallstreet.html