Did Waksal's crime deserve the time? (A Special Report: Scoring L.A.'s Public Companies).

WHEN he showed up for his sentencing, Samuel Waksal wasn't the only corporate wrongdoer in that courtroom. Present were all the executives suspected of cheating Enron investors and WorldCom investors and Adelphia's, too. So were the stock analysts whose reports glossed up dingy companies to get their business. Anyone who may have played any role in corrupting the financial markets over the past two years was in that Manhattan federal courtroom.

"This defendant has been worried that he's going to be held responsible for companies and situations that he had nothing to do with," Waksal's lawyer, Mark Pomerantz, told the judge.

As founder and former chief executive of ImClone Systems, Waksal became the first executive to be sentenced out of the scores accused in the recent parade of scandals. He should have been worried.

The judge slammed him with a seven-year, three-month prison sentence for insider trading and other crimes, a sentence years longer than he would have gotten back in the days when Enron was still flying high. The sentence "certainly reflects the tenor of the times," says James Schropp, a former Securities and Exchange Commission attorney.

Waksal deserved time, and lots of it, for cashing in on insider information, lying about his crime and telling his daughter to lies. But seven years, three months?

It's true that white-collar criminals used to get off too easy. While a few ounces of crack cocaine were landing young black men in prison for multiple years, cheating executives were just getting used to the chow at Camp Fed when they'd be out again.

The average sentence for fraud between 1997 and 2001 was a smidge over 13 months, according to federal sentencing statistics. Policy makers were right to lengthen these sentences. But they had already done exactly that before Congress passed the Sarbanes-Oxley corporate reform bill, and before President Bush began urging stiffer sentences.

Before Enron's collapse, the U.S. Sentencing Commission was at work on the issue, having realized that white-collar crooks should be locked away longer. It adopted a white-collar crime package that increased sentences.

This got little attention, as only sentencing geeks noticed. Besides, the new rules were based on years of study and public hearings, not on a crisis-driven urgency.

It was as if it never happened. Congress, through Sarbanes-Oxley, urged the commission to raise sentences, and in an "emergency" action this January the commission complied. As a result, "We'll be incarcerating first-time, non-violent offenders to time previously reserved for people who killed someone," says James Felman, a white-collar criminal defense lawyer and an adviser to the commission.

Executives who defrauded hundreds of investors out of $2.5 million or more will face mandatory life sentences.

Here's who WON'T get those kinds of sentences: All those corporate crooks whose outrageous acts pushed Congress into increasing sentences. The newly jacked up sentences apply only to those who did their dirty work after Jan. 24, 2003. It will be a long time before we see those new sentences at work.

If Waksal had done his crimes this year, he would have faced as long as 10 years in prison, according to Felman's estimate. Waksal admittedly traded on then-secret knowledge that the Food and Drug Administration was rejecting ImClone's experimental cancer drug, Erbitux. His other charges included perjury, obstruction of justice and bank fraud.

But his core crime, spur-of-the-moment insider trading, is nothing like the scheming, creative accounting and outright lying used to trick investors into believing shaky companies were solid.

Waksal's crime "was not the cynical act of a corporate insider who knows that his company is a house of cards and who wants to cash in on a Ponzi scheme so that he can make off with his personal fortune while everyone else is left holding the bag," Pomerantz told the judge.

It didn't go over. "You abused your position of trust as the chief executive officer of a major corporation and undermined the public's confidence in the integrity of the financial markets," U.S. District Judge William Pauley III lectured Waksal. "Then you tried to lie your way out of it," the judge said.

Schopp says he has mixed feelings about an insider trader being sentenced on standards newly raised by other kinds of wrongdoers.

On one hand, "insider trading didn't get much attention," before now, so "the development of the law was happenstance" and inconsistent, he said. On the other, "prosecutors and regulators are doing things because they feel they have to make a statement, and cases are being dealt with from that perspective, rather than on individual merits," says Schopp.

Lawrence Mitchell, law professor at George Washington University, also worries. Martha Stewart, indicted for allegedly lying about why she sold ImClone stock, is "getting a raw deal," he said.

Although obstructing justice is clearly a crime, prosecutors "never would have charged her in another time," says the professor.

Ann Woolner is a columnist with Bloomberg News.