SEC Enforcement completed its most comprehensive reorganization since the Division was created in the early 1970s. A new director, deputy director and other senior personnel have taken over. New specialty units have been created. The management structure has been streamlined. New initiatives such as cooperation agreements have been implemented. More cases are being brought and more money from disgorgement and penalties is being collected. All of this has been completed following Madoff and the other scandals.

The question however remains: Will SEC Enforcement ever move beyond the scandals of the recent past? Since at least the discovery of Bernard Madoff and his unprecedented fraud the Commission and its enforcement program have been mired in one scandal or difficulty after another. This repetition has made the letters “SEC” virtually a household word in middle America. Unfortunately Securities and Exchange Commission is now known for failure and error, not excellence.

In response to each recent scandal the agency has been the only thing that it can: Assert that lessons have been learned and that going forward there will be enhanced investor protections. The past is past.

This approach was on display last week as Commission officials testified before the House Committee on Financial Services, Subcommittee on Oversight and Investigations. During the hearing the Directors of the Division of Enforcement and of the Office of Compliance Inspections and Examinations provided the Committee with an update on the actions relating to the alleged Ponzi scheme of Robert Allen Stanford. Central to the testimony was a review of each recommendation made by the SEC Inspector General regarding the failure to take earlier action as to the alleged fraud. Each of the seven recommendations in the IG’s Report was examined. Each director detailed the steps taken in response.

If a central tenant of the Maddoff – Stanford debacle and other scandals was that the SEC failed in the past to detect, investigate and prosecute Ponzi schemes and other similar investment fund fraud action there should be no doubt the problem is solved. The SEC is now bringing quite literally a relentless stream of these cases. DOJ and the CFTC have also joined the effort.

The scandals appear equally relentless however. They continually surface in “wack-a-mole” fashion – knock one down and another appears. New iterations continue to surface. Madoff is over. Others have passed. Stanford has a new quite here trial date but the events about the discovery of the case have long been known. Yet there are pending and on-going questions about matters related to Madoff. There are pending and on-going investigations about Stanford.

The testimony last week was comprehensive. It answered every question. It was appropriately titled: “The Stanford Ponzi Scheme: Lessons for Protecting Investors from the Next Securities Fraud.” The question is how many times can the Commission say it has learned valuable lessons and moved on before it starts to sound like the child that cried ‘wolf” to many times?