Wandering from room to room in this farmhouse are the SEC staff. Regretfully, I found that many are ignorant or indifferent to their mission, or scornful of investors' plight, too addicted to their petty specializations in their detailed job descriptions, and way too prone to follow only the well-trodden path. They are stunned by the rapidity, multiplicity, immensity and intelligence behind the scams. Their tools of research, investigation and prosecution are confusingly changed periodically when Congress passes some new "reform" legislation, or a new Chairman or new Enforcement Director issues some memo edict on a "new approach". Staff attorneys typically bring investors only bad news and are numbed by the latters' emotional reactions, in a kind of "shell shock". The SEC lost one quarter of its staff in the last two years. The turnover of its 1200 attorneys, at 14%, is nearly double the government's average. One SEC official was quoted as saying "We are losing our future - the people who would have had the experience to move into the senior ranks". Those that stay behind and rise in the ranks are often the least inspired. At the SEC enforcement division, one is often confronted with the "evil of banality". The SEC is empowered by the Securities Act of 1933 and the Securities Exchange Act of 1934 to seek injunctive relief where it appears that a person is engaged or about to engage in violations of the federal securities laws. This is a civil remedy, not a criminal law sanction. Under well-settled case law, the purpose of injunctive relief is deterrence, rather than punishment, of those who commit violations. Investors do not know that, and are uniformly shocked when told. The "likelihood requirement" means that, once the Commission demonstrates a violation, for injunctive relief it needs only show that there is some reasonable likelihood of future violations. "Positive proof' of likelihood, as one court demanded, is hard to provide. At the other extreme, I had one former Commissioner tell me that, as he understood the law, if the person is alive and breathing, the Commission enforcement staff can show likelihood of future violations. The broad powers of the federal courts are used in actions brought by the Commission to prevent securities violators from enjoying the fruits of their misconduct. But because this is a civil and not a criminal remedy, the SEC has a unique rule where defendants can consent to an injunction without "admitting or denying the allegations of the complaint". This leads to what are called "waivers", and I submit that "waivers" are the fundamental flaw in U.S. securities laws enforcement. In a nutshell, here is the problem. A "fraudster" commits a fraud. The Commission sues for an injunction. The fraudster consents to the injunction as per above. The Court then orders the fraudster to "disgorge" his "ill gotten gains" from the scam, usually within 30 days and with interest.