Throughout the week over at Securities Docket I highlight the most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation. Here is a digest of my picks for the week ending August 23.

The Dilution Of FCPA Enforcement Has Reached A New Level With The SEC's Enforcement Action Against Oracle

Mike Koehler, FCPA Professor

Yesterday, the SEC announced a Foreign Corrupt Practices Act books and records and internal controls enforcement action against Oracle Corporation.

With the enforcement action, the dilution of FCPA enforcement has reached a new level.   The only allegations against Oracle itself is that it failed to audit distributor margins against end user prices and that it failed to audit third party payments made by distributors.  It is common for large multi-national companies to have hundreds, if not thousands, of distributors.  Because of this, audits Oracle was held liable for not conducting are not practical or cost-effective absent red flags suggesting improper conduct. The SEC did not allege any such red flag issues.  In fact, the SEC alleges that Oracle's Indian subsidiary “concealed” and kept “secret” the conduct from Oracle.  Congress did not intend for the FCPA's books and records and internal control provisions to be a strict liability statute.  The SEC used to recognize this. However, it no longer does as once again demonstrated by the Oracle action.

The familial consequences of insider trading

Robert Boxwell, Reuters

But another group of victims exists beyond the capital markets, victims whose suffering is rarely articulated: The families of newly minted insider-trading felons. The toll on their lives is often tragic. John Kinnucan's case is the most recent, but it's hardly unique….

… it's not too late for others who may be thinking about the lure of easy insider-trading money. The odds of getting caught may seem small, but if you lose, life as you know it ends. If thinking about the people on the other side of an illegal trade is too abstract and the thought of a prison sentence seems too remote to be a deterrent, try thinking about those sitting on the other side of your family dinner table.

Don't Let the SEC Punish Too Harshly

Russell G. Ryan, Bloomberg View

The ink is barely dry on the 2010 Dodd-Frank financial-reform law, but Congress is already considering new legislation that would grant the Securities and Exchange Commission its latest wish list of much higher financial penalties, especially against recidivists….

There is scant evidence that increasing penalties again would improve deterrence or financial compliance, but that is a secondary concern with the bill. More troubling is that Congress is incrementally blurring the line between civil regulatory enforcement and criminal punishment, reflecting an eerie indifference to due process and the proper constitutional allocation of law-enforcement responsibility.

Is That It for Financial Crisis Cases?

Peter J. Henning, DealBook

Last week turned out to be a good one for Goldman Sachs. The Justice Department closed a criminal investigation of the firm and its chief executive, Lloyd C. Blankfein, and the firm disclosed that the Securities and Exchange Commission had decided not to pursue a civil fraud case related to a subprime mortgage deal.

When the story of the financial crisis is finally written, this may turn out to be the denouement of the government's investigations of Wall Street for potential wrongdoing that contributed to the financial crisis in 2008.

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