It used to be bad enough that the SEC wouldn’t show up to “regulate” until schemes like Madoff and Enron had already collapsed on their own. Now, the inefficiency at the agency looks to have gone one step further, as we are finding out the SEC “never collects” much of the money that it seeks in fines from wrongdoers, according to the Wall Street Journal.
The SEC took in just 55% of the $20 billion in fines it sought through settlements or judgments in the five years that ended September 2018, according to agency statistics. In the five years prior to that, the SEC collected on just 60% of the $14.6 billion in fines it issued. And 2018 has been far worse. The commission took in just 28% of the almost $4 billion that it fined, marking the lowest rate in a decade, resulting from a $1.7 billion settlement with Petrobras that “may never require payment to the SEC”.
Instead, the settlement allows the company to give the money to Brazilian authorities and other regulators.
Those who were behind ponzi schemes or those who went to prison on criminal charges are the unlikeliest to pay fines. And the main challenge for the SEC is that they don’t have the right to seize property or assets to get payment. Instead, they have to rely on filing liens against defendants or going to court to get contempt orders.
Brad Bennett, a former enforcement director at the Financial Industry Regulatory Authority said: “It’s difficult, and they