Oct. 23, 2000, was a wonderful day for the 50% of American households that own stock in U.S. companies. Not a cloud in the sky, sunny, a perfect 72 degrees outside, and almost no humidity. Why, even the birds were singing.

Okay, I am guessing about all that. What I know for certain, though, is that Oct. 23, 2000, was the day Regulation Fair Disclosure (Reg FD) entered into force.

The Motley Fool served on the front line of the grass-roots efforts supporting Reg FD. Prior to the regulation's passage, companies routinely leaked material information about their businesses to select "insider" analysts. Stocks would move suddenly on "no-news" days, and only these analysts would know why. But today, under Reg FD, that isn't supposed to happen. Today, if a company wants to publish material information, it is required by law to do so publicly. And if a company goofs -- as will happen from time to time -- and accidentally releases material information to less than the general public, the company must swiftly "cure" its mistake by publishing the information within 24 hours.

Or so the theory goes. Some companies continue to prove the accuracy of the bell curve for intelligence by securely anchoring its left end. Since Reg FD entered into force, in fact, major players such as Time Warner (NYSE:TWX), Motorola (NYSE:MOT), Schering-Plough (NYSE:SGP), and Raytheon (NYSE:RTN) have all fallen afoul of Reg FD to one degree or another.

Now, one company has been struck twice by SEC lightning. The "lucky" company: Siebel Systems (NASDAQ:SEBL). Yesterday, the SEC hit Siebel with its second civil action in two years. Siebel's first offense came in 2001, when its CEO gave an upbeat assessment of the company's prospects to a select group of analysts, resulting in a sudden 20% rise in Siebel's stock price. Siebel's director of investor relations knew about the leak, but failed to make the required "cure." In punishment, the SEC administered a regulatory wrist slap: Siebel paid a $250,000 fine, "without admitting or denying wrongdoing," and promised to behave itself in the future.

So much for promises. According to the SEC complaint, in April 2003, Siebel's CFO allegedly did some leaking of his own at another private meeting. An officer from Siebel's investor relations department was also present at this meeting and witnessed this second Reg FD violation -- yet again no public disclosure was ordered! Result: another sudden price spike (up 8%).

Let's hope this time the SEC will realize that wrist-slapping is not an effective deterrent to corporate masochists. Hit 'em hard this time, Mr. Donaldson. Slap 'em silly.

Fool contributor Rich Smith owns shares in none of the companies mentioned in this article.