) -- Anyone with money in Steven Cohen's

SAC Capital Advisors

would be foolish to keep it there, even if they are sure the company will beat the Justice Department's indictment.

That's because those funds could become subject to a forfeiture action.

The issue here is the very use of the indictment, not the veracity of the allegations. The Justice Department knows that the use of indictment process itself is likely to shut down the hedge fund company.

The allegations themselves are packed with emotion, with U.S. Attorney Preet Bharara accusing SAC of being "a veritable magnet of market cheaters."

The Justice Department is charging SAC of hiring employees who had


to people who


possess inside information, or of paying incentives for trading ideas that turned out to be profitable, as if these activities, in and of themselves, were crimes.

One allegation, that the firm failed to use effective compliance procedures to prevent the use of inside information, may be valid, as there have been several confirmed insider trading incidents, and the firm has agreed to a substantial $616 million fine as a result.

But, doesn't the fine settle the issue? Isn't that what a settlement agreement is all about? Is there sufficient provocation to wield power which, when used, is almost certain to shut the company down without real due process"

Let's go back to the


accounting scandal. In 2002, the Justic Department indicted accounting firm

Arthur Andersen

for obstruction of justice and obtained a conviction because Arthur Andersen had destroyed Enron documents at the conclusion of its audit.

The indictment itself effectively put Andersen out of business, and 28,000 jobs were lost.

In 2005, however, in an unusual unanimous decision, the Supreme Court overturned the "obstruction" conviction, indicating that Andersen was operating within its document-retention policy and that it could not be concluded that obstruction had occurred just because documents had been destroyed.

Because the Justice Department recognized that its indictment process alone had unintended consequences, it has since used something called a "deferred prosecution agreement" which suspends an indictment as long as the company works diligently to comply with laws or regulations.

Why isn't the deferred prosecution agreement being used in the SAC case, especially since there is no indictment of Mr. Cohen himself and settlements have been reached in the insider trading allegations?

Just as an exercise, let's compare the regulatory record of SAC Capital to that of

JPMorgan Chase

(JPM) - Get Report

(JPM). In March, SAC agreed to pay a record $616 million to settle insider trading cases.

But, that amount pales in comparison to the $16 billion that JPMorgan Chase has paid in litigation expense over the three years ended Dec. 31 as documented by Matt Taibbi in

Rolling Stone

. He catalogs no fewer than 13 prosecutions and settlements with regulators plus a multitude of settlements in civil actions.

"There have been so many settlements with so many agencies around the world ... that they're almost impossible to count," he wrote.

Yet, despite these ongoing regulatory issues at JPMorgan Chase, CEO Jamie Dimon is President Obama's "favorite banker" and was seriously considered to succeed Tim Geithner as Treasury Secretary.

I am not a fan of SAC Capital or any of Wall Street's too-big-to-fail institutions and have frequently expressed my displeasure with their greed and abuses.

Here's the question I'm asking: Is the Justice Department using brute-force indictment power on SAC in order to quell criticism that it has handled Wall Street with kid gloves and that no CEO on Wall Street has been prosecuted, much less convicted, since the financial meltdown five years ago? (

Lehman Brothers


Bear Stearns


Washington Mutual




Merrill Lynch


MF Global

.) The answer to the question appears to be: yes.

After all, SAC is a big name Wall Street firm, but it only has 1,000 employees. Shuttering it is not likely to have major consequences (although it does account for 3% of Wall Street's trading volume). Not so for JPMorgan Chase. With more than 260,000 employees, the direct use of the indictment power would have systemic implications.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Robert Barone is a partner, economist and portfolio manager at

Universal Value Advisors

, an investment advisory firm in Reno, NV.

He previously held positions as an economist for Cleveland Trust Company and as professor of finance at the University of Nevada. During his tenure at Comstock Bancorp in 1996 he became a Director of the Federal Home Loan Bank of San Francisco, serving as its Chair in 2004.

Barone also served as Director of AAA of Northern California, Nevada and Utah and a Director of its associated insurance company. He currently serves on AAA's Finance and Investment Committee. Along with his son Joshua, he founded Adagio Trust Company in 2000. Barone received a Ph.D. in Economics from Georgetown University.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.