New York Post reports that the SEC enforcement chief, Stephen Cutler, has said that that the SEC is cracking down on all parties involved in corporate fraud----including outside directors of corporations.

"In a case brought against Boston-based transportation equipment company Chancellor Corp., the SEC alleged that Rudolph Peselman, an outside director who also sat on the audit committee, ignored 'clear warning signs that financial improprieties were ongoing.

'It's an important case because there have not been very many cases involving outside directors, and in particular outside directors who weren't themselves actively involved in a fraud,' Cutler told The Post.

In cases of corporate fraud, the SEC will look at what information directors had. 'You look at what info was brought to the attention of the outside director and how much of a red flag that information was or should have been,' said Cutler. "