The Enlightment of SEC Commissioner Luis Aguilar
The SEC reportedly is considering getting tougher calculating fines in matters involving corporate fraud, the Wall Street Journal has reported. The initiative is apparently driven by Commissioner Luis Aguilar, who believes that fines for fraud should in themselves deter fraud; under the guidelines the agency set up in 2006, the severity of fines is currently determined by whether a company benefited or was harmed by a fraud and whether the penalty would help or hurt shareholders harmed by the fraud.
I’ve long maintained that SEC fines too often are mere love taps and do little to discourage wrongdoing, so I naturally applaud Aguilar’s leadership.
The SEC’s five-member commission must still vote on revising the 2006 guidelines. Let’s hope that Aguilar can prevail on his colleagues.