A little noticed provision of the Senate's sweeping financial service reform bill would over-ride a major Supreme Court ruling that bars individuals from suing so-called secondary actors in a securities fraud case.

The provision comes on the heels of a bill proposed by Senator Arlen Spector that would have the same effect.

The recent restatements from three puny companies-one of which faces possible delisting from Nasdaq-could reignite the debate over whether microcap companies should be required to comply with a key provision of the Sarbanes-Oxley Act as well as highlight a showdown between the SEC and the White House and Congress.

We're talking about Section 404b of the sweeping 2002 governance legislation, which requires companies to report to the public about the effectiveness of their internal control over financial reporting. The smallest public companies with a public float below $75 million have been given four extensions to design, implement and document these internal controls before their auditors are required to attest to the effectiveness of these controls. Opponents had been whining that complying with Section 404b would be too costly for the smallest companies and drive many of them to list their shares overseas.  Alas, this never happened.

Congress is acting like a nest of mad hornets on word that the New York Fed hid some details of AIG’s credit-default insurance payouts to big banks in late 2008.

Recall that the government was in the midst of pouring $180 billion of taxpayer bailout money into AIG at the time – and that company executives were simultaneously getting multimillion-dollar bonuses. It’s not exactly clear why NY Fed officials would actively try to keep things a secret, but it’s plain that they did, judging by an exchange of e-mail messages disclosed Thursday. The SEC was at odds with the decision and the information was released several weeks later, after things had blown over some.

UTStarcom Inc. has run afoul with regulators yet again.

 This time the maker of telecom products agreed to pay $3 million for bribing people in China. Half of the penalty is going to the Department of Justice and the other half to the Securities and Exchange Commission.

In a statement that feels like it should have been uttered a decade ago, the Securities and Exchange Commission's enforcement director Robert Khuzami said the regulator will focus on financial instruments such as derivatives as it widens its crackdown on insider trading by hedge funds, Bloomberg reported. 

"The days of insider-trading scrutiny being focused almost solely on the equity markets are now gone," Khuzami said on Monday at a legal conference on hedge-fund regulation.

That's an incredible statement since Wall Street has long since extended its interests beyond equity trading. There are many, many ways to make a bet on a company.

That's some creepy stuff the feds wheeled out on Thursday in their indictment (names here) of 14 more people in the Galleon Group insider-trading scandal.  

It's a tangled and unseemly web prosecutors are describing (the art department at the SEC posts a helpful diagram here).

Two victims of the massive Ponzi scheme masterminded by Bernard Madoff want the Securities and Exchange Commission to refund their money.

Phyllis Molchatsky reportedly lost $1.7 million to Madoff. Steven Schneider, a New York doctor, lost about $750,000.

Now that the SEC has brought the hammer down on flash-traders, it's angling to get rid of dark pools, which are very close cousins to the flash trade.  I believe someone writing on this very site a couple of months ago predicted this eventuality.

Flash-trading is the practice of buying early access to market prices, and the ability to trade on that information ahead of everyone else.   Dark pools are similar in that they allow big-volume traders to do business without publicly displaying prices until after a trade is executed.  This gives a built-in advantage to players who can afford to buy into dark pools (Goldman Sachs, for instance, is what you could call a charter member).

Fresh on the heels of a scathing report earlier this month which detailed how the Securities and Exchange Commission managed to miss Bernie Madoff's $65 billion Ponzi scheme, SEC Inspector General H. David Kotz is back with 58 steps to reshape the regulator into an enforcement machine. Or at least one that isn't completely inadequate.

In two reports released Tuesday -- one on the SEC's enforcement division and another on the Office of Compliance Inspections and Examinations -- Kotz laid out his recommendations that would "ensure a basic level of competence" at the units.

When talking about the SEC these days, even that may be aiming high.