Well, I'll certainly lobby for the "willful failure to deliver" terminology.
The point though, is that if the margin regulations are in fact properly followed, these don't end up in the courts. For investors selling out of a margin account, the margin is there to be liquidated, no court action needed. And for investors selling DVP, the instutions do need to enforce the prompt delivery rules, or fines/firings need to happen. And institutions are perfectly capable of requiring additional collateral from their hedge fund customers if they feel insecure at any point in time.
However, I am generally against rushed wholesale rule changes in the securities markets, as we have seen time and time again the Law of Unintended Consequences making an appearance.
Freegards.
Requiring additional collateral is a perfectly valid idea, but big players (Merrill, Goldman, DeutscheBank, Credit Suisse, Paribas, etc) have historically been WAY behind the curve in doing so, lest they lose business to other less prudent institutions. The archetypical example of this imprudent delaying was, of course, LTCM.
I'm more concerned with the fraud aspect. The only effective counter that I know for fraudsters is to make it very, very painful --financially-- for them. I don't know that this even requires any major changes in regulations, merely in enforcement. SEC could adopt a ''guilty until proven innocent'' stance, for example, which policy would surely curb instantly some of the more egregious abuses.