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Hit 'em Where it Hurts - Not

NYT Columnist Gretchen Morgenson lays out the story of yet another egregious example of the SEC not doing its job.  This time relates to its utter failure to use the legal authority to make executives pay back their bonuses and other ill gotten gains that they only received because the companies' books were cooked. 

Nothing is ever going to change on Wall Street or corporate America unless and until executives are made to pay -- literally -- for their misconduct and the misconduct of their fellow executives and officers.  That was the whole idea behind the concept of pay "claw back":  if they got the pay when they shouldn't have due to cooked books or other misconduct, then claw back their pay and bonuses. 

It's fair, right and would be an actual deterrent!  

Why then is the power so often not used and, importantly, why when it is used is it not used against the really big dogs like Wall Street?  

Those questions could be asked of too many of the SEC's enforcement actions, which too often appear to be the anti-Willie Sutton school:  don't go where the money is - go where it isn't.  Or, as many believe, don't go after the rich, connected and powerful, go after the small fish who can't or won't bring any political or other heat on you.  

Interestingly, and many believe not coincidentally, most of the small fish who get pursued have very few ex-SEC staffers working for them or hired to represent them in SEC investigations and enforcement actions.  

Hit 'em where it hurts is long, long overdue.  The legal authority is there.  Time to make claw back a reality.  

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