I mean... it sounds to me like they did their due diligence. The PDF contains an in-depth look at how existing securities law intersects with what this group was doing. That's exactly what the SEC is supposed to do.
DAOs are new and unfamiliar. They looked at what was going on and decided not to pursue further action. That seems quite reasonable to me.
The DAO was hacked in June of 2016, and the SEC didn't release that article until July of 2017.
https://en.wikipedia.org/wiki/The_DAO_(organization)
When the SEC says:
> The Commission has determined not to pursue an enforcement action in this matter based on the conduct and activities known to the Commission at this time
What they mean is:
> We chose not to beat a dead horse, because it's already dead.
The tl;dr is that they are clearly securities under existing law. Now that the SEC has clarified that fact companies are free to issue Tokens if they comply with the law.
The SEC charged Bernie Madoff's auditors after the scheme had been revealed [1]. In respect of the DAO, the SEC appears to be taking a "wait and see" approach. (With ICOs, on the other hand, we've seen enough.)
Sure, they can pivot into rabid dog mode at any moment, but they’re allowing things to proceed while being aware that it’s gaining more mainstream appeal.
The sort of posture you’re advocating is the same sort of scaremongering as the “this is all a Ponzi scheme that will blow up any day now” types are spewing.
I can only judge them based on their actions to date, not what they might do in the future.
For instance, the SEC threatened to prosecute the DAO [1], which was certainly not a "clear unethical practice", or "flagrant violation" of securities law -- just a bunch of people voluntarily putting their money into a pool to vote on what to do with it. They could even withdraw their money at any time.
[1] https://www.sec.gov/litigation/investreport/34-81207.pdf