From Mr Kyle Rifkind.
Sir, With reference to your editorial "Investor showdown" (October 8): the fact that the Securities and Exchange Commission "already has the authority to sue third parties for aiding and abetting fraud" does not guarantee that the SEC sufficiently does so. Clearly private litigation can recover damages for investors more effectively than the SEC, as last year $53bn was awarded to clients in class-action lawsuits whereas the SEC garnered only $991m.
This was not due to "profit-driven lawyers" as your editorial suggests, but rather the numerous other responsibilities the SEC has to the government and the American people. The SEC must interpret federal laws, oversee the inspection of firms, issue and amend rules of conduct, and co-ordinate US security regulation with other levels of government. As such, the agency does not have the means to prosecute third parties to the extent that private law firms do.
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