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Secondly, Sarbanes-Oxley, the law hastily drawn to eliminate a national white-collar crime wave, actually worked, because it forced the CEO generals to haul in their lieutenants and say, “Come clean now; I am not going to jail for you.” It also re-instilled an adversarial relationship between auditors and insiders, particularly the CFO. Pre-Sarbox, accountants spent a tremendous amount of time pitching consulting businesses. For many companies, the quid pro quo became rote: You do consulting with us, we show you the best ways to mask your flaws and take on-balance-sheet debt and shift it to where the analysts and credit agencies can’t find it. Some industries, particularly those connected with telecom and energy, experienced epidemics of this kind of corruption, chiefly courtesy of a couple of sharp partners at Andersen. Those shell games don’t get played anymore because the accountants don’t have an incentive to look the other way. Auditors now catch errors instead of condoning them. They out off-balance-sheet hide-and-seek games instead of inventing them.

Third, we’ve drastically changed the penalties for white-collar perps. This past week, for instance, a former high-ranking finance executive at Dynegy, a disgusting sham of an energy company in the late nineties, got 24 years, the equivalent of life in prison, practically (he’s 38), after pleading guilty to charges of book-cooking. Such a crime five years ago might not even have been prosecuted because the Feds didn’t have much savvy in bringing the cases, and the penalties hardly made it worthwhile for the government to pursue the bad guys. Not anymore. It’s no coincidence that two crooked CFOs, Enron’s Andy Fastow and WorldCom’s Scott Sullivan, both agreed to plea bargains of at least ten years, perhaps even to be served in Oz-like pens, not country clubs, provided they cooperate fully in nailing their bosses in those men’s upcoming trials. My sources in Justice indicate that both Fastow and Sullivan were facing certain life imprisonment for their crimes if they had been found guilty.

The result of all of these changes? White-collar crime gets treated almost exactly like every other type, or even harsher; the pen’s truly mightier than the sword when it comes to stealing, these days. It all makes sense when you think about it, given the speed with which companies can be wrecked and pensions looted. With these kinds of incentives, you’ve built a tremendous amount of honesty into the system that didn’t exist before. That’s why, when I hear about accounting irregularities, I now jump not from them but toward them, buying the decline that’s based on the knee-jerk selling by others who haven’t yet figured out that the financial world, indeed, is a cleaner and better place.

Of course, others are still operating by the old rules, bolting from any accounting impropriety. These are the traders who sold Freddie Mac down from $55 to $43 last year, only to watch it soar to $60 recently when it came out that the company was actually hiding bigger earnings. These same people crushed down Take-Two Interactive, the maker of the ludicrously popular game Grand Theft Auto, to $28 on an SEC-mandated restatement early in February only to watch it fly back to the thirties when the company simply trimmed a couple of pennies off previous quarters. And how about the gains made from the accounting panic over Omnicom? The advertising giant fell from $70 to $46 over accounting problems in 2002, then doubled when it all turned out to be much ado about nothing.

How emboldened do I feel? I just bought a ton of Nortel right in the teeth of restatement fears that took the stock to the $5 level from $8. I think we’ll look back a year from now and laugh that the stock got so hammered off something so minor as a restatement of accruals from the telecom heyday.

Perhaps Nortel will be an exception to the new rule. But I can’t bet that way. Not after the stunning gains that have slipped through my grasp now that the books are no longer cooked—but, at last, clean, open, and downright honest.

James J. Cramer is co-founder of TheStreet.com. At the time of publication, he owned stock in Nortel. He often buys and sells securities that are the subject of his columns and articles, both before and after they are published, and the positions he takes may change at any time.