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 September 23.

The SEC's Ethics

WSJ.com | Sep 23, 2011

Who says partisanship rules Washington? House Republicans showed remarkable forbearance yesterday toward SEC Chairman Mary Schapiro over an ethics flap involving the Bernie Madoff case and conflict-of-interest laws. "What is clear about this situation is that you did make a mistake. You admitted such and you said had you known then what you now know, you would have acted differently," Rep. Patrick McHenry (R., N.C.) told Ms. Schapiro at a public hearing. We doubt Ms. Schapiro and her SEC cops would have been so forgiving toward someone in private life who made the same "mistake."

Testimony of Stephen J. Crimmins Before House Committee on Fin. Services, Sept. 15, 2011

Congressional testimony | Stephen J. Crimmins | Sep 23, 2011

By last summer, most of the criticisms that are now being thrown at the SEC were already out on the table.... Twelve months later, none of this has changed. We still know pretty much what we knew last summer. But are we actually appropriating the doubled SEC budget – paid with Wall Street user fees – that Congress saw as necessary and promised just last summer? No. Instead we're hearing from well-meaning but high-priced management consultants about things like “optimization initiatives”; “time-phased multi-year implementations”; “cross-work-stream integration points”; and an “executive data governance council” to develop “optimized enterprise data architecture.” What has this got to do with the active capital formation, efficient trading markets, and fraud detection we need so desperately today?

In the Insider Trading War, Market-Beaters Beware

New York Times Magazine | Roger Lowenstein | Sep 22, 2011

How much time should Raj Rajaratnam spend in prison?.... Richard J. Holwell, a Manhattan federal judge, will give his answer to that question when he sentences Rajaratnam on Sept. 27. A lengthy sentence would go a long way toward validating not just the federal prosecutors who brought the case but also the Securities and Exchange Commission, which first investigated the hedge fund. Before and since the Rajaratnam trial, the S.E.C. has brought numerous cases, part of a campaign to root out insider trading and, in theory, make markets fairer for the average investor. In recent weeks alone, the S.E.C. filed complaints against traders who ran the gamut from celebrity to ordinary.

Thanking Madoff for Exposing the SEC

WSJ.com | David Weidner | Sep 22, 2011

Thank you, Bernie Madoff. It isn't a joke. And, no, Irving Picard, I didn't make money from Mr. Madoff's massive fraud, so call off the lawyers. Still, all of us owe a bit of thanks to Mr. Madoff. After all, without his Ponzi scheme, we might never know how inept, conflicted and wayward the Securities and Exchange Commission has become.

In Galleon Case, Prison Term Is Seen as Test

DealBook | Peter Lattman | Sep 20, 2011

Federal prosecutors want to send the convicted hedge fund chief Raj Rajaratnam to prison for as long as 24 years, which would be the longest insider trading sentence in history. How a judge rules next week on Mr. Rajaratnam's punishment is being seen in legal circles as a litmus test of whether the crime of insider trading justifies such a long prison term.

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