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It's tough to figure what federal judge Jed Rakoff is trying to do in busting up the SEC's deal with Bank of America ( BAC - Get Report) on the bogus bonuses that it paid out to Merrill Lynch.

Sure, there's some really exposing going on here: The SEC acts like it is doing all this good, but they are letting bad actors off with easy settlements. The $33 million fine for $3.6 billion in undisclosed bonuses is a total travesty along the order of "Where did we get that from?" The SEC's actions are totally capricious and Rakoff's right to hold the deal up for that.

Rakoff's also right to be able to pose the question of why Bank of America's shareholders are getting dinged for this fine as opposed to the people who put the deal together. I don't see the sense in that other than corporations are set up for the liability to go to the shareholders and there's not much Rakoff can do to change that.

But what makes no sense at all to me is that Rakoff concludes that the reliance on the lawyers by Bank of America and Merrill is the real travesty, and that if the companies relied on lawyers, why not go after the lawyers? That amounts to saying that the government couldn't find any bad actors, so let's go after those who advised them.

This is total nonsense. Just ridiculous. Who cares about the lawyers? It is the principals that did wrong, not the lawyers. If you lay things off on the lawyers, you have two results: the principals go without punishment and the lawyers from now on just say to the principals, "Go plead guilty, we aren't going to risk our hides defending you." That accomplishes nothing.

If Rakoff believes the whole thing's a travesty of justice, why not just tell the SEC to refer to case to Justice? If there is no smoking gun, no liability, then don't say the lawyers did it.

I have been cheering Rakoff for exposing the facile and silly way the SEC does its work. I have been cheering that he says the shareholders shouldn't have to lose more money. But his ridiculous conclusion gets us nowhere.

Bank of America's execs and Merrill's execs should pay. They should pay with their hides if they hid this $3 billion heist from shareholders. And $33 million from the shareholders' pockets, not the principals' is meaningless.

I believe the SEC should recommend this deal to Justice and get to the bottom of it. I think that Mary Schapiro, in trying to "get the job done," made a terrible decision to settle this for $33 million. While I don't like state interventionism on these matters, I understand why New York Attorney General Andrew Cuomo feels compelled to get some justice against Bank of America and Merrill execs for these bonus travesties.

It's the same way that Sarbanes-Oxley, which I originally favored, has been taken to extremes. If the government decides that people should be put in jail using existing laws, the wrongdoing going forward is cut down. If we make capricious decisions to clear dockets like we got from the SEC in this case, we accomplish nothing except setting Congress to work to come up with new laws instead of using old laws that would have done the job if the government had just enforced them.

If we kill the lawyers (a la Shakespeare, who should have been referred to rather than Rakoff's gratuitous reference to the old Oscar Wilde saw about a cynic knowing the price of everything and the value of nothing), we accomplish nothing and we are just setting ourselves up to equal justice for none. Ultimately all of the so-called tough talk by President Obama down on Wall Street yesterday now feels totally hollow. He's railing about outrageous bonuses and risk-taking and chastising Wall Street at precisely the time that his watchdog is slapping wrists on the ultimate bonus outrage of all time, a hidden $3 billion financed by you and me.

The fault, dear president (to invoke the Bard again), is not in the stars, it's in the SEC and the president's own inability to see that enforcement of existing laws (rather than new laws) will get the job done much better than this $33 million dollar fine paid for by the people the execs abused to begin with.

At the time of publication, Cramer was long Bank of America.

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