The SEC's image has certainly taken a beating recently, what with the discovery that the Madoff scandal festered under the agency's nose for years and a general feeling by the investing public that the SEC has failed to look out for its interests.

But, the US Securities and Exchange Commission offered a bit of bright news last week when it announced that, for the first time, it has distributed more than $2 billion in a calendar year to injured investors as a result of its enforcement actions and proceedings.

"There is no substitute for returning money to defrauded investors," said Robert Khuzami, Director of the SEC's Division of Enforcement.

As the SEC explains in its release, the Sarbanes-Oxley Act gave the agency the authority to distribute civil penalties and ill-gotten gains to injured investors. Before SOX, the SEC could give investors only the ill-gotten gains. Since the law was changed in 2002, the agency has distributed roughly $6.6 billion to investors, according to the press release.

"Our sharp focus is on improving the effectiveness of our Fair Fund Program in order to accelerate the return of money to harmed investors," added Mr. Khuzami.

Distributions to injured investors have been made this year in 31 cases brought by the Commission, involving illegal conduct ranging from accounting fraud to pump-and-dump schemes to mutual fund market timing. Among the distributions this year were more than $840 million to approximately 257,000 injured AIG investors, more than $320 million to approximately two million injured investors in Alliance Capital mutual funds, and more than $240 million to approximately 700,000 injured Bear Stearns investors.

(Continue reading at Law.com)