Elisse Walter, chairman of the Securities and Exchange CommissionWhether you have millions of dollars invested in stocks, or a few thousand bucks in bonds or mutual funds, it's vitally important to you that the Securities and Exchange Commission -- Wall Street's cop on the beat -- is doing its duty. Not just being seen, that is, but actually getting out there and enforcing the law.

After all, what good is it to have a high-profile police officer on patrol if he or she doesn't occasionally chase down a few law-breakers and crack some heads? If laissez faire policing becomes the norm, the bad guys stop fearing retribution and the rest of the community suffers.

Unfortunately, there's some evidence to suggest the SEC may not be doing as much head-cracking as it's claiming.

Reorganizing for Assault

Bloomberg is reporting that of 734 securities enforcement actions the SEC undertook in 2012, 228 were what's known as "administrative proceedings": essentially follow-up actions to cases that had already been brought. That leaves 506 new cases brought by the SEC in 2012, which is fewer than it filed in 2009.

The number of new actions brought by the SEC in 2011 also did not surpass the number of new cases brought in 2009. This comparison with 2009 matters because it was after that year -- in the wake of the financial crisis and the coming to light of Bernie Madoff's massive fraud scheme -- that the enforcement agency famously reorganized.

Mary Shapiro -- who became head of the SEC in 2009, not long after the Madoff affair surfaced -- headed up that reorganization, and spent the next four years trying to convince the American public that Wall Street's policeman was back on the case.

She stepped down this past December, but right before she left, the SEC issued a press release touting the agency's accomplishments, citing the above-mentioned numbers as evidence of just that.

Hit Me with Your Best Shot

So if the SEC isn't pursuing new enforcement actions like it used to, based on its 2012 record, what are these follow-up actions the agency is spending 31 percent of its time doing?

Some of the administrative proceedings referred to earlier included "barring people who've already been found guilty of fraud from working in the industry," and "temporarily suspending accountants from practicing before the SEC," says Bloomberg.

Essentially, this follow-up work is putting penalties into place for judgments that had already been rendered, some of which -- according to Bloomberg -- were from cases brought years earlier.

But to be fair, it's not like the SEC has been completely sitting on its hands in the time since the crisis and its own organizational revamping.

In the past two-and-a-half years, the agency has brought crisis-related enforcement actions against both JPMorgan Chase (JPM) and Goldman Sachs (GS), two of the country's biggest banks, which got mixed up in some of the more financially abusive aspects of the crisis (JPMorgan less so than Goldman).

The SEC also claims that, in those same two-and-a-half years, it filed crisis-related actions against 117 defendants -- almost half of whom were CEOs and other high-level managers -- which resulted in penalties and "disgorgements" (the repayment of ill-gotten gains) of $2.2 billion.

The Toughest Neighborhood Around

But given the massive financial devastation wrought by the banks and other similar institutions -- so much of which arose out of poorly or outright fraudulently structured securities -- you would think there would be an excess of new work for the SEC to do, and therefore even more enforcement action would have been taken.

As mentioned earlier, a cop on the beat keeps the peace by virtue of not just visibility, but also with a credible record of law-enforcement action. To be truly effective, you can't have one without the other. And while every neighborhood can benefit from such a firm-but-fair presence, the tough ones need it most.

And is there a tougher neighborhood than Wall Street? Or one that can more adversely affect the wealth and well-being of the average American when it's not properly policed?

The Treasury Department puts the amount of household wealth lost in the financial crisis in the U.S. alone at $19.2 trillion, which seems to be answer enough to that question.

You can follow Motley Fool Contributor John Grgurich on Twitter @TMFGrgurich. He owns shares of JPMorgan Chase & Co. The Motley Fool owns shares of JPMorgan Chase & Co.

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