Yesterday, we posted comments by Professor John Holcomb about SOX.  Among other things, he noted that one criticism of SOX was that it was not tough enough on corporate misbehavior. 

In that regard, we take a moment to point out an article by Lisa Nicholson, a professor at the University of Louisville, Louis D. Brandeis School of Law.  InThe Culture of Under-Enforcement (5 DePaul Bus. & Comm. L. J. 321), she suggests that SOX did not go far enough.  She makes the case that in addition to the prison sentences contained in the Act, SOX should have provided for increased use of forfeiture.  In other words, prison should have been coupled with seizure of any gain obtained from the misbehavior.  As she writes:  

• "Meaningful asset forfeiture sanctions are needed to shore up the Act's deterrent impact.  In its effort to combat rising lawlessness in decades past, Congress focused on the economic motives of wrongdoers and authorized the seizure of those illicit proceeds traceable to their criminal acts to better combat drugs, organized crime, bank fraud, and insider trading (to name a few).  Why then should the government limit itself to use such a powerful weapon only against these particular offenders.  The ability to return to the lifestyle once lead (purchased with funds fraudulently obtained from their former corporation) should be eliminated."

Food for thought.  The paper is thorough, examines the penalty provisions of SOX in great detail (including the legislative history) and worth a look.