There’s an old ethics joke made popular through the years by legions of Borscht Belt comedians which goes something like this. “If an elderly woman came into your store and bought something for $10 dollars and mistakenly handed you a $100 bill, and then left before you discovered her error, do you, or don’t you, tell your partner?”

Ba-Dum-Pa.

But it’s safe to say stand-up legends such as Corbett Monica, Morty Gunty, Will Jordan or Shelly Berman played no part in helping draft a Senate bill which, to be polite, puts the thumbscrews to individuals committing securities fraud. It can safely be assumed that the bill is devoid of any and all humor — not that any aspiring comic I know scours House and Senate legislation for material.

All jokes aside, the measure, co-sponsored by Sen. Carl Levin, D.-Mich., and Sen. Bill Nelson, D.-Fla., imbues the Securities and Exchange Commission with increased powers to impose heartier fines and the ability to subpoena records without first notifying the company or individual under examination.

The legislation affords the financial watchdog the opportunity to fine any number of complicit groups — accountants, investment firms, attorneys, and company executives — without first stopping for a visit at federal court to ask permission to levy such fines.

And those who find themselves the subjects of those aforementioned fines better have their checkbooks ready as the floor-to-ceiling range of fines will escalate to $100,000 to $2 million, from its previous levels of $6,500 to $600,000.

That quantum leap in financial penalties sort of makes sense when you consider the annual revenues of some of the current poster children for corporate fraud such as WorldCom and Enron. In fact, if anything, the new penalties may still be too light, but that’s a discussion for another time.

Levin, the bill’s co-sponsor, was quoted as saying that previous tries at passing similar type of increased fraud legislation had been blocked, not surprisingly, by former Senate Banking Committee chairman Phil Gramm.

This time, there was little doubt, as the bill, packaged ironically under the nomenclature of The CARE Act, breezed through via a 95-5 margin. However, before any overzealous lawmaker begins popping the celebratory corks in their battle against fraud, it should be noted that the legislation still requires approval by the House and by the primary resident of 1600 Pennsylvania Avenue.

But I’m confident that the bill will pass—mostly intact.

Because have you noticed that every time someone on Capitol Hill naively relaxes in the battle against corporate fraud, something on the order of HealthSouth brings them crashing back to reality? Hey wait, maybe there is a joke in there somewhere.

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