Fast Times at Ridgemont High (1982)

Jefferson's Brother: My brother's gonna kill us! He's gonna kill us! He's gonna kill you and he's gonna kill me, he's gonna kill us!
Jeff Spicoli: Hey man, just be glad I had fast reflexes!
Jefferson's Brother: My brother's gonna $#!+!
Jeff Spicoli: Make up your mind, dude, is he gonna $#!+ or is he gonna kill us?
Jefferson's Brother: First he's gonna $#!+, then he's gonna kill us!
Jeff Spicoli: Relax, alright? My old man is a television repairman, he's got this ultimate set of tools. I can fix it.

According to several articles such as this one from Bloomberg, the SEC brought 574 enforcement actions in fiscal 2006 (which ended September 30), 9% fewer than the 630 cases it brought in 2005. According to the article:

The drop was largely a result of reduced staff, SEC Chairman Christopher Cox said in the statement. The agency restricted hiring in 2006 because it had to close a $48.7-million budget gap triggered partly by cost overruns in building a new headquarters in Washington.

As elaborated on in this Washington Post article,

Cox attributed the decline to temporarily reduced staff levels. The SEC as a whole lost 155 employees last year -- including 43 in the enforcement unit -- compared with fiscal 2005. A total of 3,696 people worked at the agency in 2006, with 1,189 in the enforcement division. The agency is reviewing its staffing levels and plans to restore some of the unfilled positions, officials said.

The message here from the SEC seems to be that its enforcement program suffered somewhat because it was "grappling with staffing cuts" (as the Post put it), but that they are actively trying to restore these positions and this situation will hopefully be resolved soon. That is a plausible response but it strikes me as quite different from the message the SEC sent out in August 2004 when it was similarly reported that the number of SEC enforcement actions in fiscal 2004 would be declining for the first time in many years. At that time, then-Chairman William H. Donaldson took the "half-full" approach, and declared that the decline was, in fact, "encouraging" in that it could indicate that the SEC's efforts are having a deterrent effect. He was reportedly "quick to add that it was too early for the SEC to declare victory in the war on corporate corruption." Chairman Cox could have seized on the continued decline in enforcement actions (down from as many as 679 in 2003) as additional encouraging news, but he seems to have taken the opposite approach: that fewer cases equates to a bad situation that may require a response (i.e., hire more people).

So my question: Is the fact that there are fewer enforcement actions year-over-year a good thing or a bad thing? Or neither?

And to the SEC, guest blogger Jeff Spicoli says, "Make up your mind, dude!"