"What do I care about the law. Ain't I got the power?" steel magnateFrederick Vanderbilt once said. As Americans watch an array of equally arrogant, next-generation robberbarons being led away in handcuffs, scorned investors are speculating on who will be arrested next. Meanwhile, it's D-Day for big firms to recertify their number-crunching, and
new math problems are surfacing. But the road from aggressive accounting to criminal fraudcan be a tough one to navigate. If the Securities and Exchange Commission requires a team ofinvestigators and months to determine the severity of a violation, how canindividual investors be expected to determine the difference between, say,the bad-but-not-criminal issues unearthed so far at AOL Time Warner ( AOL) and thealmost-laughable criminal shenanigans of Adelphia executives? Good question. Those distinctions are tough for retail investors to suss out before thewhip comes down. What will help stem unnecessary panic-selling of manystocks, however, is a better understanding of how regulators and theJustice Department tackle these issues.