COPS AND ROBBERS.(Securities and Exchange Commission)

Allen Wolfson was a Renaissance man, in his own way. Between 1999 and 2002, he was involved in the stock-market rise of at least seven companies. Freedom Surf made wet suits and surf apparel. Learner's World ran a day-care center. Stem Genetics did stem-cell research. Rollerball International made inline skates. Hytk produced and transported natural gas. The only thing connecting these companies was Allen Wolfson--that, and the fact that they were scams.

Some people, like Andrew Fastow, the former chief financial officer of Enron, can con investors out of tens of millions of dollars while working at one company. Wolfson had to be more industrious. He had to keep moving. He was what's called a stock promoter--someone who takes shares in a worthless company, inflates their price by means of chicanery and hype, and then dumps them before the price collapses. For example, he made Freedom Surf's stock octuple in two months by directing a broker to jack up the price with false bids. And he and his son used a front company in Laos as part of a scheme to persuade foreign investors that companies like Stem Genetics and NCI Holdings were the next big thing. Never mind that Stem Genetics had no laboratory and no scientists, and that NCIH's only office was a mailbox.

The woods have always been full of Wolfsons, but, thanks to the combination of the Internet, cheap telecommunications, and a flood of new, inexperienced investors, these are especially fertile times for fraud. When the big corporate scandals came to light in 2001 and 2002, the Securities and Exchange Commission stepped up its enforcement efforts; between 2001 and 2003, its caseload rose by thirty per cent, and its haul, in fines and disgorgements, quadrupled. Some people are even going to jail--in 2003, Wolfson was sent away for securities and wire fraud. Still, the S.E.C. is struggling to keep up.

Some people don't consider this to be a problem. As the shock over Enron and WorldCom has faded, many corporate Americans have decided that the regulators are too meddlesome. Some are understandably frustrated by the money and time it takes to comply with new accounting and auditing rules, and unhappy with what they consider the S.E.C.'s excessive prosecutorial zeal. So when the White House announced, last month, that the conservative lawmaker Christopher Cox, who has a record of supporting securities deregulation, would be the S.E.C.'s new chairman, it seemed to be a sign that the commission intends to lighten up.

No such luck. While Cox is unlikely to put any new regulations on the books, he seems committed to sniffing out and punishing fraud--which is the S.E.C.'s most important task right now. Scandals may tend to provoke a regulatory overreaction, and some of the agency's recent edicts and actions (like ...