On "Meet the Press" today, host Tim Russert took pains to point out in the Xerox accounting scandal that the SEC fine was $10 million -- on an overstatement of $6 billion. Yes, the fine is a pittance -- but who pays that fine? Give you a hint: It's not the accountants, the board of directors or the corporate officers.

The fine comes out of the shareholders' pockets in the form of a smaller dividend payment (if any). Of course, Xerox shareholders have already been punished with lower stock values.

Russert suggested that the fine should be much higher because of the size of the accounting fraud -- but instead of ameliorating the hurt felt by the average investor, the bigger fine would hurt more.

The fine can be used to make a public relations point, but if you're really seeking to punish the wrongdoers a fine to the corporation doesn't work. It's like trying to punish the knight by killing the squire. All it hurts is the knight's feelings -- maybe.