The SEC doesn't have the authority to bring criminal charges. They can refer the case to the locality, state or DOJ. You can see with SCOTUS and the Skilling case this year that the Federal govt will need a better law than "honest services" to pursue these cases in the future. I do think a certain number of these cases (I think they involved bribery amongst JPMorgan and some local officials to game the system) were brought at the local level.
Correct, I should have been more clear.
The SEC does have a big influence on whether the DOJ brings criminal charges, starting with how the SEC handles the settlement of civil charges. When I say “no criminal charges were brought” - I meant that the SEC didn’t refer cases to the DOJ or USAO for prosecution. The DOJ (especially) seems far too occupied recently with chasing terrorists.... and then letting them go. But that’s not an issue the SEC can solve. Referring cases is an issue they can solve.
If we see the phrase “without admission of wrongdoing” inserted into the mea culpa letters by offenders to the SEC when they make their settlements, that’s a clue that the SEC won’t be making criminal referrals to the DOJ. We saw a variant of this turn of phrase, “without admitting or denying wrongdoing” in the auction rate securities settlements. If there was a case which was cut-and-dry for criminal enforcement of wire fraud charges, the ARS mess was it. They were sold as “safe as cash” - and there is nothing in the market that is “as safe as cash” other than cash. Once someone uses that phrase “safe as cash” on something that isn’t cash, the DOJ should be called in and wire fraud charges brought immediately. It is that simple.
The SEC finally started showing a little spine when they took on Goldman this past spring, but the size of the settlement was still far too small. If the SEC wants their civil enforcement actions to sting, they have to make the monetary settlements so large that they affect the bonus structure of the i-banks.
That means amounts in the 10’s of billions.