It used to be bad enough that the SEC wouldn’t show up to "regulate" until schemes like Madoff and Enron had already collapsed on their own. Now, the inefficiency at the agency looks to have gone one step further, as we are finding out the SEC "never collects" much of the money that it seeks in fines from wrongdoers, according to the Wall Street Journal. The SEC took in just 55% of the $20 billion in fines it sought through settlements or judgments in the five years that ended September 2018, according to agency statistics. In the five years prior to that, the SEC collected on just 60% of the $14.6 billion in fines it issued. And 2018 has been far worse. The commission took in just 28% of the almost $4 billion that it fined, marking the lowest rate in a decade, resulting from a $1.7 billion settlement with Petrobras that "may never require payment to the SEC". Instead, the settlement allows the company to give the money to Brazilian authorities and other regulators. Those who were behind ponzi schemes or those who went to prison on criminal charges are the unlikeliest to pay fines. And the main challenge for the SEC is that they don’t have the right to seize property or assets to get payment. Instead, they have to rely on filing liens against defendants or going to court to get contempt orders. Brad Bennett, a former enforcement director at the Financial Industry Regulatory Authority said: “It’s difficult, and they have to be especially persistent to get the numbers up.” The Government Accountability Office criticized the SEC in 2014 for lapses in its recordkeeping that understated the amounts owed by defendants by "at least $42 million". But don't worry, according to the report, the commission has been "building a new computer system to track unpaid fines" since then. Ignoring that this was more than a half decade ago, perhaps someone could have informed the SEC that electronic spreadsheets have been around for nearly 4 decades. Instead, the agency has written off more than $10 billion in fines since 2019, including monetary penalties and disgorgement. At the end of 2018, the agency was owed about $1.5 billion but only expected to collect $228 million, according to its financial statements. John Nester, an SEC spokesman, said: “We have a committed group of attorneys and paralegals in the dedicated office of collections who work hard to collect these funds, many of which will be distributed to harmed investors.” The SEC often measures its success by how much it can levy in fines and how much it can collect. In the case of the Petrobras settlement, the SEC is taking credit for a fine that it will likely never collect. Excluding the case from 2018 data, the SEC's collection rate would’ve been closer to about 51%. And it is an arduous process. For example, in April the SEC asked a federal judge in Georgia to enforce a five-year-old judgment against an advisor who is required to pay more than $360,000. The defendant, Ernie Montford, has been paying the SEC monthly from his Social Security income, but that has only yielded about $21,000 so far. Montford, 71 years old, said: “The SEC stomps on little firms like mine. If I could have paid more, I would have paid them.” The CFTC, for comparison, boosted its recovery rate in 2018 after years of volatile performance. It collected $857 million in 2018, topping 90% of the fines that it issued. That amount collected may include cash tied to cases that were concluded in prior years, according to the way the CFTC reports its numbers. In 2016, the agency reported collecting about 479 million, or 37% of the fines that it ordered. Michael Shaub, a professor of accounting and accounting ethics at Texas A&M University, concluded: “From a public-policy perspective, people would rather see bad guys fund the SEC than good guys.”