s.e.c. institute penalties specifically for poor performance that rating agencies if they're going to continue to be used for regulatory risk assessment which they are you know that's what is happening no fundamental changes happen in that area that the quid pro quo should be since they're being paid by the issue is that they rate that they should have to pay a fine based on poor performance if their ratings turn out to be wrong in the dead is not repaid in full and that the amount that they should be fined should be you know some multiple of the wiis that they received and i don't think it would be that difficult for the f.c.c. to institute a fairly simple. system of fines and i think under dodd frank they already have the power to do so but i haven't seen any movement from their quarter to do that one of the issues one of the problems with trying to make the ratings better through issuing having fines or having a system of penalties is that people like richard just say well we should just get rid of ratings altogether because they're obviously conflicted and stupid let's get rid of them but

stearns, lehman brothers-- to varying degrees, many other institutions that were helped by the government. what is your sense of why the s.e.c. chose to go after fannie and freddie first or rather than the other private sector institutions? >> i suspect part of what may be behind this is in fact the government controls fannie and freddie now. their regulator runs and operates them. so when the s.e.c. reachans agreement with the company, it's like the government negotiating with itself on these particular cases. and it might have made it easier to do some of these filings from that perspective. on the other hand, it does raise the question of when you had similar situations at the private sector, large institutions, the dib banks that required the bailouts and all, just as fannie and freddie did, why hasn't the s.e.c. brought the same type of cases at those. for example, we know that those executives were telling investors things were okay at the same time that we now know the fed was lending massive amounts of money for them. so it seems like you've got a dichotomy between how the s.e.c. is treating someone that's totally co