Drugmaker Biovail's $10 million settlement with the Securities and Exchange Commission to settle some seriously bad fraud charges makes fascinating reading. And it's a lesson for anyone who thought Sarbanes-Oxley was going to stop fraud. It also tells us that the SEC is one big lumbering and slow-moving enforcer.

"We allege that Biovail and senior executives engaged in a pattern of systemic, chronic fraud that impacted its public filings of quarterly and annual reports over the course of four years. In an effort to conceal the fraud, Biovail's senior officers intentionally misled the company's auditors and the investing public, showing their complete disregard for their responsibilities to shareholders," Mark K. Schonfeld, Director of the SEC's New York Regional Office said in the SEC statement.

He's not kidding. Read the SEC complaint and judge for yourself. Biovail used tried and true methods to perpetrate the fraud.

Allegations include Biovail creating fictitious accounts where nearly $100 million of expenses and liabilities were moved off its accounts and into a special purpose vehicle, a made-up transaction that concocted $8 million of revenue and the misstating of foreign exchange losses. The best one was the way it blamed its failure to meet a third quarter 2003 earnings guidance on a truck accident, the corporate equivalent of "the dog ate my homework".

Given that Sarbanes-Oxley establishes criminal liability for failure of corporate officers to certify financial reports - where they would get up to 10 years when they know that the periodic report doesn't comply with the act, and 20 years for willfully certifying a statement knowing it doesn't comply with the act - you would have to wonder whether more charges are coming.

But the SEC investigation is far from over. But don't expect it to be resolved quickly. As Motley Fool's Brian Orelli points out, the case shows that the SEC is no fast mover.