The Securities and Exchange Commission has found Michael Lauer in contempt of court for violating an asset freeze order, acting in bad faith by not participating in the discovering process involving his hedge fund Lancer Management Group. To outspoken New York Post columnist Christopher Bryon the latest action is an example of SEC ineptitude, as the agency spends its resources going after small fry while not pursuing what could have been an eye-opening enforcement case against Lancer's administrator, Citco Fund Services. Bryon says the SEC has been sitting on top of the Lancer case since the firm went belly-up in 2003, and two weeks ago, according to the Post, a court ordered the unsealing of some 40 pages of internal e-mail memos and the like from 2002.

Pursuing a case against Citco, Bryon writes, would have sent "an unmistakable message to the entire hedge fund industry that those who break the law will go to prison." Instead, he says, all the SEC can expect to get at the present is an injunction barring Lauer from the industry and relatively small fines. Bryon blames "revolving-door leadership at the top [the agency has its fourth chairman in five years of the Bush administration], staff defections in the middle ranks and bewilderment at every level" regarding what constitutes "improper and illegal" hedge fund behavior.