TribLIVE

| USWorld

 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

SEC's most fearsome prosecutorial weapon lies in shame

Email Newsletters

Click here to sign up for one of our email newsletters.

Daily Photo Galleries

By The Washington Post
Saturday, Jan. 26, 2013, 4:58 p.m.
 

WASHINGTON — If the Senate confirms Mary Jo White as head of the Securities and Exchange Commission, she'll be missing a lot of the enforcement tools readily available to her during her near-decade as U.S. Attorney in Manhattan.

The threat of long-term prison sentences won't be an option because the SEC handles only civil cases. Wiretaps, search warrants, undercover operations and grand jury investigations are also out of the question.

In other words, without some help from the Justice Department, even a hot-shot prosecutor like White simply cannot deliver if the public wants to see Wall Street barons behind bars.

That doesn't mean that the agency lacks plenty of muscle to flex.

One of the most effective tools at the SEC's disposal is also one of the most basic: shame. The agency has the power to carry out an investigation and issue a tell-all story about an individual, even if it finds no violation, said James Cox, a professor of corporate and securities law at Duke University.

The goal of federal securities law is not necessarily retribution but deterrence. That's why the longest-standing remedy at the SEC's disposal has been injunctive relief, basically barring a person from engaging in a particular conduct.

Although those penalties are key, some securities experts say the SEC's power to bar individuals from serving as officers or directors of a public company can be far more damaging. Fines may not mean much to a person of wealth, but taking away a person's livelihood can be the ultimate punishment.

Subscribe today! Click here for our subscription offers.

 

 


Show commenting policy

Most-Read Nation

  1. Federal Reserve Vice Chairman Fischer open to interest rate hike
  2. Common Core test results released
  3. Man arrested in deputy’s ambush
  4. Will Trump run as independent? He says decision will be made soon
  5. Quarter-million without power as Pacific Northwest jolted by wind
  6. TSA agent accused of sex abuse at LaGuardia Airport
  7. Landfill Atari game cartridges net $100K
  8. Racist motive hushed, right says
  9. Indians, Asians lead Mexicans among immigrants in U.S.
  10. Long Island college student arrested for trying to record police, civil liberties experts say
  11. Katrina anniversary blends mourning, joy at recovery