Web Watch: Best Blog Posts and Columns For the Week Ending August 14

However creative, however hard-working, however deceitful the Madoff-DiPascali team, it wasn’t only their work that kept the Ponzi going so long. It was the SEC’s failures at detection, even when told the operation looked amiss.

Rather than talk about limitations on securities litigation, the legislation introduced by Senator Specter would expand the cause of action for fraud. While the Bill may never become law, it is, if nothing else, a symbol of the changed attitudes and atmosphere in connection with securities regulation.

A recent academic study concludes that institutional investor involvement in securities litigation not only enhances investors’ success in seeking financial recovery, but also improves the quality of the companies’ corporate governance. It is an effective corporate monitoring tool for institutional investors.

A major dispute over how severely to punish a corporate “insider” who makes gains from trading in the company’s stock with information other investors don’t have seemed a likely bet for Supreme Court review. But that won’t happen now: the Justice Department has decided not to test the question further, after losing on it recently in the Tenth Circuit Court.

Want To Be A U.S. Attorney? First, you’ll have to get through the all-important Washington interview at Main Justice. Here’s a peek at the process — and the gatekeepers to your future.

Of the many complex regulatory questions being discussed in Washington, how to fund the SEC seems to fall lower on the priority list than many other issues. But should it? In an environment in which a stronger SEC is necessary, the drawbacks to being funded by Congress instead of self-funded may become clearer.

By allowing parties to pay a fine without “admitting or denying” the alleged regulatory offense, the SEC is nothing more than a collection agency. It’s high time for the SEC in signature cases to require a bank, broker or rogue Wall Street executive to admit some liability before settling a civil enforcement action. And if that condition is a dealbreaker, then go ahead and sue ‘em.

In a move that recapitulates a classic dispute that has been brewing in bankruptcy court for years, the Stanford Financial Group receiver has asserted that the proceeds of Stanford’s D&O insurance policies are “receivership assets” and that his right to the proceeds “supersedes” the rights of insureds under the policy.

I’m just not all that fussed. I mean you could interpret SOX 304 to say to executives, “If you get a bonus because you meet a goal, and it later turns out that the goal wasn’t really met because someone messed with the numbers, then you need to give the money back. Even if you didn’t do anything wrong, you didn’t really earn that money.”

The SEC’s settlement with former Maurice “Hank” Greenberg, the former CEO of AIG, signals the end is near for the accounting fraud investigations that toppled him from office in 2005 under the threat of indictment by former New York Attorney General Eliot Spitzer. The settlement even allows Greenberg to claim with a straight face that he wasn’t accused of securities fraud, even if he was in the neighborhood of it.

Perhaps the most telling aspect about Preet Bharara, the next United States attorney in Manhattan, may be how he managed to win the trust and respect of even those who might have been his natural opponents.

My suggestion that the apparent second quarter securities lawsuit filing lull was due in part to the fact that plaintiffs’ lawyers have a backlog of cases outside the financial sector has proven controversial. All I can say that there is an increasing amount of evidence consistent with the backlog hypothesis.

The head of the SEC’s Division of Enforcement, Robert Khuzamii, said last week the agency will put more attention on the Foreign Corrupt Practices Act. Among five specialized enforcement units to be created will be one devoted to the FCPA.

No one at Bank of America or GE has been ordered to pay for their misdeeds. If the Securities and Exchange Commission is serious about cracking down on illegal behavior, the people — not just companies — must be held accountable.

Unlike the DOJ which has historically centralized all FCPA prosecutions at “main Justice” in DC, the SEC has traditionally given its regional offices the authority to independently prosecute FCPA cases. With Khuzami’s announcement, change appears to be in the works and it will be interesting to see whether this new approach will yield any noticeable differences in SEC prosecution of FCPA offenses.