The SEC has struggled mightily to promptly and efficiently distribute "Fair Funds" collected as a result of its enforcement actions and proceedings. Today, however, it announced that for the first time it has distributed more than $2 billion in a calendar year to injured investors. The SEC said that it hit the $2 billion mark in 2009 with the November 20 distribution to investors of more than $40 million related to a late trading scheme involving Ritchie Capital Management.

Since gaining the authority in 2002 under the Sarbanes-Oxley Act to create so-called "Fair Funds" comprised of both civil penalties and ill-gotten gains to be returned to injured investors, the SEC has now distributed approximately $6.6 billion to investors. "There is no substitute for returning money to defrauded investors," said Robert Khuzami, Director of the SEC's Division of Enforcement.

The SEC stated that the $2 billion in distributions included:

more than $840 million to approximately 257,000 injured AIG investors;

more than $320 million to approximately two million injured investors in Alliance Capital mutual funds; and

and more than $240 million to approximately 700,000 injured Bear Stearns investors.

*Little known fact: The "Fair" in "Fair Funds" is actually an acronym. It stands for

FederalAccount forInvestorRestitution