The best names in Wall Street, who besmirched themselves with double-dealing stock-market scandals, were finally "punished" recently, and the miscreants could not contain their glee. And why not? Their shared fine of $1.4 billion is trivial alongside the tens of billions that Citigroup, JP Morgan Chase, Merrill Lynch, Morgan Stanley and other firms harvested in the process of duping hapless investors. In the accustomed manner of Wall Street's gentlemanly settlements, nobody admitted guilt and everyone agreed not to do it again. R. Foster Winans, the former Wall Street Journal reporter who went to prison in the 1980s for passing insider tips to traders, correctly describes penalties for the big boys as mere "nuisance fees."

Thus we now have scandal on top of scandal. New York State Attorney General Eliot Spitzer gamely initiated these actions against the dominant financial houses, but he lost his nerve along the way. The settlement includes some novel regulatory remedies--Citigroup chairman Sanford Weill is forbidden to talk to his stock analysts without a chaperone present--but these are ludicrous gimmicks (count on it: Weill's wishes will be made known to underlings who are his stock touts). The hollowness of Spitzer's victory was made clear the next day when Morgan Stanley chief executive Philip Purcell boasted, "We have maintained our standards, in market share as well as reputation." Spitzer harrumphed, and the new SEC chairman William Donaldson rebuked Morgan Stanley for "a troubling lack of contrition."

It's too late for scolding, gentlemen. Wall Street beat the rap. Despite the historic proportions of these scandals, the charade of enforcement is now exposed. Spitzer focused on the outrages more energetically than the federal regulators at the SEC, but the meaning is obvious. Behavior that in other business sectors would be immediately understood as "lying, cheating and stealing" on a grand scale is effectively decriminalized in the realm of high finance, at least when the evidence points to leading titans.

This is not news, of course, but one would have thought that the scale of this plundering could inspire action from the political sector--reform of the financial regulatory laws to establish hard-nosed liabilities for culprits, including enforceable criminal standards. Neither political party wishes to touch that subject--yet another scandal. The ugly conflicts of interest embedded in all-service financial firms insure that the corporate clients will be well served by sacrificing the people whose money is in play, from 401(k) investors to the major pension funds that passively followed Wall Street investment counselors and, as a result, lost trillions for working Americans. Get used to it, we are told. This is how capitalism works.

The only true remedy, if there is to be one, must come from the victims themselves--investors willing to rebel against their status as hapless "marks" by withdrawing their funds from the offending financial firms. Pension funds must find new, trustworthy advisers and help create independent investment firms content to serve only one client--the people whose money is at risk. If the pension fund managers fail to act, then the true losers--working Americans whose retirement savings are plundered--should go after them: confront the inept managers through lawsuits and political action, demand a new standard of behavior from these failed fiduciaries or toss them out.

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