In this recent final judgment, issued yesterday (September 17, 2007), the SEC revealed what is wrong with its enforcement efforts against penny stock manipulators. There was no punitive fine; the accused were only required to give up their profits. This was despite the “egregious nature” of the offenses. If I were to steal $100 from my neighbor I would be ordered to pay restitution plus a fine (often larger than the restitution), and yet these people allegedly stole hundreds of thousands of dollars and they paid no penalty besides giving up their ill-gotten gains and promising not to do it again.
“The Court ordered Barnwell to disgorge $31,700 and prejudgment interest thereon. Casias was ordered to disgorge $334,097. Keener was ordered to disgorge $162,000 and was permanently barred him from acting as an officer or director of any publicly traded company. The Court did not order penalties.”
Disclosure: I believe that the SEC is incompetent. I have never committed fraud or any other securities violations.