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 December 16.

The Limits of Bigger Penalties in Fighting Financial Crime

DealBook | Peter J. Henning | Dec 16, 2011

Seeking greater punishments for white-collar offenders gives the impression the government is taking steps to prevent crime, but there is a substantial question whether these proposals will have any appreciable impact on deterring future violations. The problem is not so much the penalty that can be imposed but proving a violation so that the punishment can be meted out. The paucity of criminal prosecutions from the financial crisis shows that the real difficulty lies in gathering evidence to prove a crime took place. 

Who's the ‘Insider' in Insider Trading?

The Criminal Law Reporter | Timothy Crudo, Satyanand Satyanarayana, Kathleen Fox | Dec 16, 2011

... Given the push by enforcement authorities to expand the web of those who may be subject to these relationships, the number of insider trading cases brought under the misappropriation theory can be expected to grow. But just as this theory expands the universe of potential defendants, as United States v. Gansman recently showed, the very same relationship of trust and confidence on which the theory is based may be turned by an alleged tipper into an insider trading defense.

In Hunt for Securities Fraud, a Timid S.E.C. Misses the Big Game

DealBook | Jesse Eisinger | Dec 14, 2011

Agency officials continually advertise how few resources they have, how costly trials are and how irresponsible it is to shareholders to force a trial when a reasonable settlement can be won instead.... In doing so, the agency has Beltway blinkers on. Sure, it's speaking to Congress, but Wall Street is also listening. When it complains, even legitimately, about its budget or how costly and difficult trials are, the S.E.C. is inadvertently showing its belly to Wall Street in a sign of submission. It's whimpering that it will shy away from a trial, afraid of draining its coffers.

Congress's Phony Insider Trading Reform

WSJ.com | Jonathan Macey | Dec 13, 2011

If the law passes in its current form, insider trading by Congress will not become illegal. I predict such trading will increase because the rules of the game will be clearer. Most significantly, the rule proposed for Congress would not involve the same murky inquiry into whether a trader owed or breached a "fiduciary duty" to the source of the information that required that he refrain from trading.