There’s been an important development in the fight against financial fraud. Today, The Wall Street Journal broke a story with broad implications. The Securities and Exchange Commission barred Bernard Madoff from the securities business.

We all feel safer, right?

Yeah, right.

Haven’t the horses already broken from the gate? Madoff duped the SEC. He torched the portfolios of 8,800 investors. He’s sharing a New York prison with a Somali pirate and the new arrival from Guantanamo. His wife can’t even book tables at New York restaurants according to last Sunday’s New York Times.

And now the SEC is barring Bernard Madoff from the securities industry, four years after Harry Markopolis identified his operation as the world’s biggest Ponzi scheme.

What a waste of energy. Acrimoney believes the SEC should focus on more productive issues, like the separation of money management from financial reporting. Consider the case of Lake Shore Asset Management.

Authorities just indicted the director of the Chicago hedge fund for operating a $300 million fraud. According to the NYT, the fund concealed $38 million in trading losses incurred from 2002 to 2007.

Five years of fake reporting.

If the SEC mandated two sets of financial reports—one from the banks where securities are held and one from the money managers—these frauds would be more difficult to perpetrate. Two sets of financial statements would act as a check and balance. Frauds could not endure.

Instead, the SEC is barring a guy from the securities business who may well spend his remaining years in jail.

Have you seen that box on your taxes, the one which asks whether you care to donate $1 to presidential elections? Maybe we could buy the SEC a cup of coffee instead.