So let's see if we can find a common thread in a couple of news items that have wafted over from the Securities and Exchange Commission.

The first was a dilly. The ink is still wet on the SEC lawsuit against Goldman Sachs ( GS) -- you know, the one alleging offenses so grave that prosecutors are said to be interested -- and already it seems destined for the round file. There are persistent reports that the bank is in settlement talks with the SEC. Got to put that bad stuff behind 'em and keep on giving clients great service. Got to resuscitate that share price. Got to... wait a moment. What about the rest of us? Doesn't the public deserve a full airing of the charges, along with a determination if they are true or false? That doesn't happen in SEC "neither admit nor deny" settlements.

Then there's that crash-uncrash spasm in the markets the other day. Rumors whirled that it was caused by one guy pushing the wrong button. It was nuts. The House Financial Services committee hurriedly convened a hearing to find out what happened, and called the one person in the world one logically assumes would be on top of the situation, SEC chairperson Mary Schapiro.

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Think again. "Ultimately, we may learn that the extraordinary disruption in trading, however it may have been triggered, was the result of a confluence of events which, taken together. . ." she said (let's pause for breath now and continue) ". . . exacerbated what already had been a down day and led to an extraordinarily steep price drop and recovery. However, we are not prepared at this time to draw that conclusion."

Maybe Ms. Schapiro isn't prepared to draw a conclusion at this time, but I am. I've concluded that in a whole range of things that we're witnessing in the markets nowadays, the SEC is more than just negligent, more than just out to lunch, but just simply inept. It's becoming glaringly obvious that the problem with the SEC is not lack of resources, or poor organization, or ideological undermining from the top -- beginning with Ronald Reagan's SEC chairman John S.R. Shad, and continuing under Harvey Pitt and Chris Cox -- but a simple lack of competence that doesn't seem to be abating.

I know, I know, it's not fair to sweepingly diss the entire staff of the SEC. It has plenty of hard-working and dedicated professionals, such as the elite fraud-busters at work on the Goldman case. I must also ritually genuflect in the direction of the new SEC enforcement chief, Robert Khuzami, who is working hard to turn around his agency after decades of neglect. Still, the more I think about it, the more I keep coming around to that same "competence" conclusion.

There's more than just the Goldman negotiations (assuming those reports are correct) and Schapiro's cluelessness at last week's hearing. You know the rest. Do I really have to list them? There's the non-investigation of Bernie Madoff, which non-commenced under the overrated Bill Clinton SEC chairperson, Goldman Sachs "advisor" Arthur Levitt. There's the non-supervision of the banks (ditto). There's the SEC's mishandling of Allied Capital ( ALD), which jiu-jitsued SEC officials into investigating hedgie-whistleblower David Einhorn. Speaking of whistleblowers, there's a pattern of ignoring whistleblowers from Madoff's nemesis Harry Markopolos to a guy who wanted to dish the dirt at Moody's ( MDY) to an exec who was blown off when she approached the SEC about R. Allen Stanford's ponzi scheme. There's the Internet porno scandal and the ever-revolving door that puts SEC officials on the payroll of investigation targets. It just keeps going on and on. Any stock trader who has ever encountered a grimy company cooking the books, and gotten straight-armed by an unresponsive SEC, has his or her own horror story.

There's even a pattern from a decade ago repeating itself. Remember how Eliot Spitzer used to make the SEC look bad by driving a truck through the gaps in the SEC enforcement program? That's happening again. Last week, it was reported that New York State Attorney General Andrew Cuomo has commenced an investigation of eight banks to determine if they conned financial rating firms. The targets of the probe include all the usual suspects. Apart from Goldman, there's Merrill Lynch, now a unit of Bank of America ( BAC), Citigroup ( C), Morgan Stanley ( MS), Credit Suisse ( CS), Deutsche Bank ( DB), Credit Agricole and UBS ( UBS). There also are reports of the Justice Department getting involved to investigate Morgan Stanley's role in the mortgage meltdown.

The problem with saying that the SEC is inept is that it's not exactly constructive criticism. So here's a constructive suggestion: Chairperson Schapiro, don't settle with Goldman. Period. Play out that hand. If you lose -- well, if you're still around, quit. Come to think of it, that might not be a bad idea no matter what happens.

And give some thought to dumping those consent decrees in which companies neither admit nor deny liability while pledging never to repeat the conduct they don't admit doing. In early April, Khuzami said that the SEC was considering more frequently issuing "statements of facts" when it settles securities law violations. That's a statement in which it sets forth what happens in a case -- who got ripped off, how it was done, and so on. Defendants don't like such statements. It implies that they did something wrong, God forbid.

That wouldn't be nearly enough, even if statements of fact become standard practice -- which is not being contemplated, by the way. Consent decrees let defendants off the hook without something that society expects from shoplifters at a 7-Eleven -- an admission of guilt. That's a dog that needs to be put to sleep, not given a worming. Some of us might say the same thing about the SEC.

MORE GARY WEISS COLUMNS:

Wall Street Weed Killer

Goldman Case Like Drexel Burnham Deja Vu

Good Side of Short Selling Eclipsed by Goldman

Bring Spitzer Back Before It's Too Late
Gary Weiss has covered Wall Street wrongdoing for nearly two decades. His coverage of stock fraud at BusinessWeek won many awards, and included a cover story, ?The Mob on Wall Street,? that exposed mob infiltration of brokerages. He uncovered the Salomon Brothers bond trading scandal, and wrote extensively on the dangers posed by hedge funds, Internet fraud and out-of-control leverage. He was a contributing editor at Cond?ast Porfolio, writing about the people most intimately involved in the financial crisis, from Timothy Geithner to Bernard Madoff. His book Born to Steal (Warner Books: 2003), described the Mafia's takeover of brokerage houses in the 1990s. Wall Street Versus America (Portfolio: 2006) was a hard-hitting account of investor rip-offs. He blogs at garyweiss.blogspot.com.

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