Securities and Exchange Commission sanctions fell to the lowest level since 2002 after Republican commissioners complained that heavy penalties hurt investors and the agency brought fewer billion-dollar accounting fraud cases.
The SEC, led by Chairman Christopher Cox, extracted about $1.6 billion in fines and illicit profits in the year ending Sept. 30, compared with more than $3 billion in each of the previous three years, according to a report the regulator released last week. In 2002, when Congress passed the Sarbanes-Oxley corporate governance law, the total was about $1.4 billion.
"The cases they're bringing these days are much smaller," said James Cox, a securities law professor at Duke University in Durham, N.C., who isn't related to the SEC chairman. The commission has adopted "a new ethos about penalties," based on the concern that "savaging" companies with fines amounts to punishing their investors, he said.
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