Jeremy Hobson: Now to Washington, where two former Bear Stearns executives have settled with the federal government. They were accused of misleading investors about the quality of risky mortgages a few years ago. The two men will have to pay
about a million dollars, but they won’t have to admit any wrongdoing.

And as our Washington bureau chief John Dimsdale reports, that’s not good when it comes to deterring future financial crimes.

John Dimsdale: Like in this case, even when SEC prosecutors extract a fine, they let traders and investors avoid admitting guilt. For the last 35 years, Roman Weil helped prosecute — and defend — people accused of trading violations. He says, when the SEC wins…

Roman Weil: Then all they ask is that the party sign a piece of paper saying ‘I didn’t do it but I promise not to do it again.’ That’s been the way it’s been. It’s been quite ineffective.

The SEC is under increasing pressure to have settlements include an admission of responsibility. Columbia Law School professor John Coffee says that’s especially true after the subprime mortgage meltdown.

John Coffee: The public isn’t satisfied by a defendant saying ‘maybe I did, maybe I didn’t, I’m not saying.’ That doesn’t create any sense of retribution or transparency as to what really happened.

Judges are also criticizing the SEC for settling cases too cheaply. In the Bear Stearns case, the judge called the $1 million penalty “chump change.”

In Washington, I’m John Dimsdale for Marketplace.