According to an analysis by the Times, 51 violations of the SEC's anti-fraud statutes committed over the last 15 years can be traced back to the same 19 banks. In each case, the bank usually pays a nominal fine and promises that it will never happen again, only to be caught breaking the same laws. Basically, these Wall Street banks SWEAR that they'll stop cheating, but the SEC keeps catching them taking showers at 3 a.m. and working "really late tonight."

This has something to do with the fact that in every settlement, the banks—including Bank of America, JPMorgan Chase, Merrill Lynch, and Goldman Sachs—"neither admit nor deny" the charges. They just cut the SEC a check and keep on keepin on. "It's like a cop giving out warnings instead of giving tickets," Senator Carl Levin, who has led inquiries into Wall Street banks. "It's a green light to operate the same way without a lot of fear that the boom is going to be lowered on you."

But Robery Khuzami, the SEC's director of enforcement, says that the reprimands are serious, and are taken into account when calculating penalties. "It's a thumb on the scale," Khuzami tells the paper. "No one here is disregarding the fact that there were prior violations or prior misconduct."

Besides only being able to threaten banks with civil suits, another aspect that makes the SEC seem toothless is that it's staffed by people who used to work for big financial institutions or will after they leave. "The revolving door is such a dominant fact about the SEC's culture," a Columbia law professor tells the Times. "You get people who go to Washington for one to three years and then go back to Wall Street." Khuzami himself used to work for Deutsche Bank.

When he hired Joesph Kennedy to be chairman of the SEC, President Roosevelt made the argument that "You need to set a thief to catch a thief," but if that were the case then Bernie Madoff would be running the SEC right now. In any event, on Wednesday a federal judge is set to review a $285 million settlement between Citibank and the SEC for crimes that allegedly committed during the housing bubble. No doubt the SEC will be told that Citibank is "really sorry, baby. Lets go to IHOP."