It's time to overhaul SEC's fine-collecting

The Securities and Exchange Commission has collected only $190 million of the $480 million in fines it levied from 1997 to 2002, according to a report by the General Accounting Office. A majority of those shortfalls stem from a few large cases, many of them still in litigation, the study states. The GAO found that the SEC collection rate from closed cases was 94% between 1997 and 2002, compared with 83% for the 1992-96 period. The SEC should be lauded for making progress in its collection of fines. However, there's still room for improvement in the SEC's fine- collecting efforts. The agency could upgrade the programs it has in place to collect monetary penalties from its enforcement cases by using the collection services at the Department of the Treasury, the GAO suggests in its report. The SEC has agreed to develop a strategy that would enable it to refer older cases to the Treasury Department for additional collection efforts. In addition, the SEC has an- nounced plans to overhaul its case management system to track delinquent payments. Stephen Cutler, the SEC's director of enforcement, says the commission's new database will be completed by the end of fiscal 2003 and will flag more delinquent cases. It's obvious that implementation of an improved case management system will be key to the success of the SEC's mission to protect investors and maintain the integrity of the securities markets. Efforts to develop such a system must continue. [More: Implementing a social strategy that won’t get you fined by the SEC]