As pernicious as this may sound, the very fact that it has a common name, ?window dressing,? implies that it is a practice well known to executives and sophisticated investors, specifically the type of investors most likely to react to quarterly reports. The risk that does not appear on the statement is already known to large investors

The fact that the SEC is trying to portray what had become standard acceptable accounting procedures as toxic in one or two isolated cases rather than admit that most heavily financialized firms engage in the practice betrays a latent desire to intervene in markets in ways that cannot be defended candidly . The situation remains clear as something that sophisticated investors knew already, and it has become a way for the SEC to get involved more intrusively in corporate accounting and justify economic intervention for the sake of regulation and to the detriment of shareholders, who will bear the brunt of the additional expenses as the lost profits pass to investors.