“The Senate approved legislation Wednesday that would strengthen the hand of regulators to attack corporate wrongdoing by giving the Securities and Exchange Commission new powers to punish wayward lawyers, accountants and corporate officers and directors,” writes Richard Oppel in today’s New York Times.

“The legislation, if approved by the House and signed by President Bush, would enable the agency to impose steep fines on a broad range of wrongdoers without first obtaining approval from a federal judge. It would also make it easier for investigators to subpoena financial records without tipping off the target of their inquiry.”

“In all, the measure would plug significant holes in the agency’s enforcement net that in some respects had left the agency with lesser powers than banking regulators have, despite the sweeping securities law changes passed in the wake of the corporate scandals of the last two years.”

“Under existing rules, the commission has the power to fine Wall Street firms and investment advisers only through an administrative proceeding at the agency. To obtain fines against accountants, lawyers, corporate officers and directors or anyone else who violates securities laws, the agency must go to federal court. That court action would no longer be necessary under this legislation, although the fines could still be appealed to federal court.”

“In addition, the legislation would allow the agency to impose substantially bigger fines. Currently, the maximum fines range from $6,500 to $600,000 — depending on the infraction — but the legislation sets maximums of $100,000 to $2 million.”

“For example, securities law violations involving ‘fraud, deceit, manipulation or deliberate or reckless disregard of a statutory or regulatory requirement’ could result in fines of up to $500,000 for individuals and $1 million for corporations. Violations that also caused ‘substantial losses or created a significant risk of substantial losses to other persons or resulted in substantial pecuniary gain to the person who committed the act or omission’ could bring fines up to $1 million for individuals and $2 million for corporations.”

“Now, the S.E.C. must get approval from a federal judge to subpoena records secretly. But the legislation passed today would require custodians of subpoenaed financial records to turn the material over to investigators in many cases without disclosing the subpoena to the subject of the inquiry.”