The Wall Street Journal had a feature article (subscrip. req’d) last week on the SEC’s efforts, pursuant to Section 308 of Sarbanes-Oxley (the “Fair Funds” provision), to pay out some of the large civil penalties it has collected to investors. The article focuses on the logistical challenges of the WorldCom case, where tracking down all of the injured investors and sorting out their claims is expected to take close to two years.
Quote of note: “Regulators are looking for cheaper and faster ways to get money back to investors. While the Fair Funds program was set up to be separate from private class-action lawsuits, the SEC is moving to work more closely with trial lawyers and has hitched several of its Fair Fund efforts to related class-action settlements that cover a similar set of investors. SEC funds have been combined with class-action settlements in about a half-dozen cases, including the agency’s $150 million settlement with Bristol-Myers Squibb Co. and its $25 million settlement with Lucent Technologies Inc.”
The 10b-5 Daily 