Paul Krugman today is shrill on the subject of the mutual fund scandals, lucidly explaining them in his usual lucid, cogent shriek. But the SEC is on the case. They're dealing with the problem. Consider what they've already achieved in their settlement with the Putnam mutual funds company:

The settlement with the S.E.C. did not outline what penalties or fines would be paid by Putnam. Restitution will be determined later. As is customary, Putnam neither admitted nor denied the accusations.

So what did the commission extract from Putnam in the quickie deal? An independent board of directors, something the company previously claimed to have; compliance controls, which the company was already supposed to have; and employee trading restrictions, which Putnam should have had all along.

They sure are tough negotiators down there at the S.E.C. Fund companies that have turned up abusive trading practices in their own shops will surely cheer this settlement and line up to receive their own version.

Which, of course, helps to deal with the problem, by giving the fund companies something that they can point to in assuring their marks investors that the problem has been dealt with.

So what do you think the problem was?