Wall Street's top securities watchdog has made a big show of finally forcing wrongdoers to admit wrongdoing when settling fraud charges. But so far that's all the change looks to be: for show.

The Securities and Exchange Commission will take extra care, and its own sweet time, implementing the new policy, according to a report by The Wall Street Journal's Jean Eaglesham (subscription required). Though the SEC claims to be pulling together a "hit list" for its "landmark change" that "could start to bite within weeks," it also seems to be limiting its application of the new policy to small, nearly bankrupt firms that have little reason to fight back, the WSJ suggests.

The SEC also "hopes the first deal to include an admission of wrongdoing could come before Labor Day," Eaglesham writes. Here's hoping! But, hey, no rush.

It has only been SEC policy for several decades now that banks, hedge funds and other bad actors running afoul of securities regulations are allowed to settle charges against them without admitting or denying wrongdoing. The idea is that these perps would rather fight the agency in court for years than admit to evil deeds and open themselves up to criminal charges or private lawsuits. By letting them off the hook, the SEC avoids blowing its meager resources in court and gets money back to investors more quickly.

But the practice has created thunderheads of criticism and cognitive dissonance in recent years, with the too-big-to-fail set able to tiptoe away from the financial crisis with relatively small fines and no blemishes on its permanent record. In perhaps the most infamous case, Goldman Sachs admitted no wrongdoing in 2010 when it settled claims that it misled investors in building mortgage securities full of toxic junk hand-picked by hedge funds betting against the investors.

Citigroup cut a similar deal over toxic securities in 2011, but that was finally a settlement too far: It was brutally rejected by U.S. District Judge Jed Rakoff, who wrote, "An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous."

The SEC's new policy, announced last week by new SEC chief Mary Jo White, is designed to quiet the critics who warn the agency is creating moral hazard by letting banks get away with financial murder with only minor fines.

But given all the constraints the SEC is reportedly putting on this new policy, that is all the shift seems designed to do: Quiet critics. It does not seem designed to actually address the problem of creating moral hazard. The biggest banks and hedge funds, which have too much to lose if they admit wrongdoing, will not just roll over as long as they know they can crush the SEC beneath the weight of their well-paid lawyers.

The SEC appears to know this, too. White has admitted already that her awesome new policy will be used sparingly, in only a few cases. Legal experts tell the WSJ that these cases will include only the most flagrant lawbreakers, along with companies that have one foot in bankruptcy already and don't much care who sues them. From this pool will likely come some handy scapegoats, but it looks like the status quo will not be disturbed.

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  • 5. Citigroup Inc.

    Citigroup sacked CEO Vikram Pandit late last year, after he had shepherded the bank through the financial crisis and then fired thousands of workers as well. That, on its own, would be enough to destroy employee morale, but the bloodletting was not over. Pandit’s successor, Michael Corbat, said he would fire 11,000 more. The bank’s board may have been frustrated with the pace of cost reductions under Pandit, but that was not the only issue that the board apparently believed had hurt long-term shareholder value. Pandit’s mishandling of the sale of its Smith Barney unit caused Citi to write down $2.9 billion, and the action triggered a cut in its credit ratings by Moody’s. Such actions did not endear Citi to investors. The recovery of Citi’s shares since the global financial meltdown has been far worse than its major competitors. Citi’s relationship with its customers has also been awful. It took a place on the MSN Hall of Shame of the 10 worst companies in America based on customer service. Its ACSI ratings, already low, further plunged in 2012. According to Interbrand, Citi’s brand value dipped 12% last year, and is now only two-thirds that of rival J.P. Morgan Chase & Co. (<a href="http://247wallst.dailyfinance.com/quote/nyse/jpmorgan-chase-co/jpm">NYSE: JPM</a>). <a href="http://247wallst.com/2013/01/09/the-10-most-hated-companies-in-america-2/#ixzz2HgYwI3wE">Read more at 24/7 Wall St.</a>

  • 4. Facebook Inc.

    Facebook alienated its investors in a particularly public fashion, which was played out for days in many major media outlets in the U.S. and abroad. Its IPO was one of the most widely anticipated since the dot-com public offering bubble years of 1999 and 2000, which was immediately followed by a collapse in the value of many of those offerings. From its IPO price of $35, the stock fell to below $20 in less than three months. Facebook has had customer satisfaction issues for some time, but recently did a particularly good job of alienating a portion of its nearly one billion members. According to the ACSI, Facebook is one of the most strongly disliked American companies, beaten out only by three public utilities companies. This comes in part from the company’s continuing user privacy concerns. Mark Zuckerberg’s company did not help itself in this regard in 2012, after it announced that it had the right to republish any and all photos in the accounts of its Instagram users. <a href="http://247wallst.com/2013/01/09/the-10-most-hated-companies-in-america-2/#ixzz2HgYlDO9d">Read more at 24/7 Wall St.</a>

  • 3. T-Mobile USA

    Last year, plans were in the works for AT&T Inc. (<a href="http://247wallst.dailyfinance.com/quote/nyse/att/t">NYSE: T</a>) to buy the U.S. branch of this struggling wireless carrier from its parent company, Deutsche Telekom. In December, AT&T cancelled those plans after the Justice Department sued to block the acquisition, saying the deal would “substantially lessen competition” in the industry. It appears that Deutsche Telekom is is now stuck with what is increasingly becoming the black sheep of the big four U.S. carriers. T-Mobile’s 4G network in the U.S. lags the other three carriers, and customer satisfaction is tied with AT&T mobility as the worst among wireless carriers, according to the ACSI. T-Mobile also rated as one of the worst in customer service according to MSN/Zogby’s annual poll. T-Mobile plans to improve its position through a marriage with smaller wireless company MetroPCS. It also plans to finally offer its customers the iconic iPhone. The fact of the matter is that these changes may be too little, too late. The company had an extraordinary net loss of 1,558,000 subscribers in the first three quarters of last year, out of the roughly 33 million it had at the end of 2011. During the same time, AT&T and Verizon Wireless continued to gain customers. <a href="http://247wallst.com/2013/01/09/the-10-most-hated-companies-in-america-2/#ixzz2HgY1d9aY">Read more at 24/7 Wall St.</a>

  • 2. Dish Network Corp.

    Dish’s remarkably poor customer service ratings show up in more than one survey. Customers knock its record in both the ACSI and in the MSN Money/Zogby poll. In the latter, it makes the “hall of shame” as one of the 10 worst-rated companies. Dish further alienated itself from its customers last May when it dropped several channels, including AMC. Among the shows that went off the satellite service were the highly popular “Mad Men” and “Breaking Bad.” Employee ratings of their experiences at the company are as terrible of those of its customers. In a recent BusinessWeek story titled “The Meanest Company in America,” former and current employees called the environment created by the company’s founder as a “culture of condescension and distrust.” Glassdoor’s employee rating for Dish is among the worst in its entire survey that covers thousands of companies. Dish recently made an offer to buy broadband provider Clearwire, which would expand the satellite TV company’s broadband presence. <a href="http://247wallst.com/2013/01/09/the-10-most-hated-companies-in-america-2/#ixzz2HgXd2GsR">Read more at 24/7 Wall St.</a>

  • 1. J.C. Penney

    J.C. Penney went from being a mediocre national retailer with modest challenges to one of the great public company management disasters of the last few years. Former Apple retail chief Ron Johnson joined as CEO in November 2011, and promptly decided to radically change the chain’s pricing policy. The negative reaction was immediate. Sales fell 20% in the first full quarter after Johnson began to implement his plans, and the company continued to lose sales at a rapid rate. Customers defected in droves as a sign of their dissatisfaction with the new retail model laid out by Johnson. And with its stock falling more than 40% since Johnson joined, shareholder are also livid with the company, which has also completely eliminated its dividend. Durban Capital’s retail analyst Steve Kernkraut recently said, “It’s been a disaster, and it probably will continue to be a disaster. They’ve made every misstep you could imagine.” <a href="http://247wallst.com/2013/01/09/the-10-most-hated-companies-in-america-2/#ixzz2HgX4fpM1">Read more at 24/7 Wall St.</a>