This MSN-Slate article suggests that the best way to punish corporate criminals is through lawsuits, not prison sentences. The article gives an overview and link to a recent study that examined this topic and also touches on the SEC's role in investigating these issues from a public and private standpoint. I thought this article related to our recent class dicussion on holding business misfits accountable for their actions along with how these issues that may affect stockholder perceptions.

...according to this study by a troika of Ivy League economists—Dartmouth's Rafael La Porta, Yale's Florencio Lopez De Silanes, and Harvard's Andrei Shleifer—stockholders shouldn't hunger for perp walks and criminal prosecutions. In fact, markets develop better when civil—not criminal—law is strong.

Their conclusion is surprising—and surprisingly practical. What works best, it turns out, is a combination of mandated disclosure (thus allowing the markets to work their efficient magic) and the ability of plaintiffs' lawyers to sue the hell out of corrupt CEOs and underwriters. In short, a more private system. As for cops at the SEC, they may talk tough and hold flashy press conferences when they nab insider traders. But in the global scheme of things, they may not be so important.