Exactly how they plan to do accomplish this is not exactly clear at this point...but no doubt we'll here more in the near future about the SEC's plans:

Via The Ely Times:

New SEC Guidelines Shield Shareholders

By ELLEN SIMON
AP Business Writer
28 January, 2006

NEW YORK - How can the Securities and Exchange Commission punish corporate crime without punishing shareholders? But even hundreds of millions of dollars in fines at the corporate level did little to compensate shareholders. At the beginning of January, the SEC issued a statement on financial penalties for corporations, saying it will look at "whether the issuer‘s violation has provided an improper benefit to shareholders, or conversely whether the violation has resulted in harm to shareholders. The guidelines are meant to bring "clarity, consistency and predictability" to the SEC‘s enforcement efforts, agency Chairman Christopher Cox said at a news conference.

Atkins called the SEC‘s statement "a more rational and systematic approach to deciding whether to impose penalties on shareholders." "The statement is so general, it really doesn‘t tell you much," said Peter J. Henning, a former senior attorney for the division of enforcement at the SEC who is now a law professor at Wayne State University in Detroit. "It‘s kind of what everyone knew already: If you cooperate, it‘s going to help you. If senior management were involved, it‘s going to be a problem. How extensive the wrongdoing was and what timeframe it covered will be considered." For investors, there is no punishment for corporate crooks that will make them whole.

The SEC imposed fines and restitutions totaling $715 million from Adelphia, but it didn‘t come close to pulling investors out of the red. The company‘s peak market cap, before the scandals and subsequent bankruptcy, was $8.4 billion. "I wish I knew," Henning said. "To this point, no one has come up with one. ... It‘s so much easier if someone steals your purse."

The original article appears here.

-- MDT

Labels: New York AG, Peter Henning