The SEC Wins Another One

"Former hedge-fund titan Arthur Samberg agreed Thursday to pay nearly $28 million to settle insider-trading allegations, ending a long-running case that got an unexpected boost from disclosures in the divorce case of the accused tipper. ... But the divorce of a former Microsoft Corp. employee who allegedly told Mr. Samberg about Microsoft earnings gave the SEC the break it needed, more than seven years after the alleged insider trading. Mr. Samberg, whe once managed $15 billion, didn't admit or deny wrongdoing. ... Mr. Samberg, 69 years old, will pay nearly $18 million in disgorgement and $10 million in penalties. ... The SEC said it also filed civil-fraud charges against Mr. [David] Zilka, and accused him of withholding information from regulators during an earlier probe that concluded without charges. 'The two cases have two particularly troubling aspects: a hedge-fund manager trading on illegal inside information, and his tipper source who withheld crucial information about the scheme during an SEC investogation,' said Robert Khuzami, the SEC's director of enforcement. 'Both are high-priority targets for SEC enforcement'. ... The agency reopened the probe after new evidence came to light from Mr. Zilkha's divorce proceeding in January 2009, which included new emails, allegations of hush money and a confession to a therapist. The discoveries proved to be a critcial link for the SEC, which had known that Mr. Samberg was looking for information about Micrisoft from Mr. Zilkha but didn't have evidence that Mr. Zilkha provided it ," my emphasis, Kara Scannell at the WSJ, 28 May 2010, link:

http://online.wsj.com/article/SB10001424052748704269204575270451427692356.html.

Hasn't the SEC anything important to do, like investigate bank "earnings"? This case looks like another wasted SEC effort. Why should the SEC make cases like this "high-priority"? What is the SEC trying to divert our attention from?