More on the SEC Waivers

The NY Times has put its two cents in with regard to the SEC's giving big financial institutions a pass.  Their analysis determined that over the last decade the SEC has given these behemoths almost 350 waivers (i.e., no penalty for wrongdoing). The Times study found that of all the waivers the SEC issued in that time period almost half went to companies that had committed the same offense time after time.

Interestingly, the SEC is more likely to punish a firm if it lies about its own business, but not about a security it is selling.  In the words of Richard Painter, an expert in securities litigation and enforcement, “If a company has trouble telling the truth to investors in one batch of securities it is underwriting, I would not have confidence that it would tell the truth to investors about its own securities.” 

A former SEC chairman, David Ruder, believes that these waivers “might have vast repercussions affecting the ability of a firm to continue to stay in business”.