Sense on Cents

When the punishment does not fit the crime, is there any surprise that crimes, frauds, and other unsavory behaviors will persist? Human nature and pervasive greed on Wall Street being what they are, the environment for fraud was a breeding ground.

Many thanks to a loyal reader for sharing a recent story which highlights this dynamic in a favorite topic here at Sense on Cents, auction-rate securities. McClatchy writes, For the Feds, Some Firms Are Too Big to Punish:

Then in 2006, the SEC cited Citigroup and other firms for improperly marketing “auction rate securities,” bonds issued by municipalities, student loan entities and corporations. The agency censured Citigroup and fined it $1.5 million, and Citigroup promised to clean up its sales practices. The SEC indicated that was good enough: In its attempt to deter more lawbreaking, the SEC declared, “this settlement is appropriate.” (more…)