Posted on 12/16/2008 5:09:03 PM PST by NormsRevenge
WASHINGTON – Staff at the Securities and Exchange Commission failed many times over a decade to fully investigate credible allegations of wrongdoing by money manager Bernard Madoff, the head of the SEC says, calling it a serious agency breakdown.
SEC Chairman Christopher Cox said he is "gravely concerned by the apparent multiple failures" by staff to look into claims about Madoff's business and to seek formal authority to investigate.
(Excerpt) Read more at news.yahoo.com ...
Chris Cox has been a huge disappointment at the SEC. It’s as if he’s a test case for the Peter Principle. What a shame.
I suspect there will be more.
I doubt it was a coincidence that 1st we had the banks and Wall Street largest players and then the whole group and now the hedge hogs. The hedge fund issue has been discussed on some investment forums for well over a year.
Almost like a well timed plan.
Agree with you on both reasons, but you might throw a little incompetence in there for good measures.
Just another worthless federal agency wasting good tax money that US families could be using to accomplish worthwhile things.
And some people actually want to put the feds in charge of their health care. They must be smoking crack.
don’t worry, Obama will regulate the economy to death.
“Two possible reason for the SEC not to have investigated Madoff.”
CNBC reported today that the SEC did investigate him and issued a clean bill of health on him last year. Every last one of those who signed off on that report should have been fired last Friday.
Apparently, there were some savvy investors who blew the whistle on Madoff ten years ago, and kept filing complaints that his numbers of a 10% gain every year could not possibly be correct, but the SEC just wasn’t interested because HE SAT ON ONE OF THEIR ETHICS PANELS! You can’t make this stuff up.
The one smart thing McCain did during the election was to call for the firing of Christopher Cox. How does this moron keep his job? All of the money manager experts I’ve heard on the cable channels have been screaming that he’s the biggest screwup in the government and that he should be tossed out on his can. Bush, as usual, does nothing. Who is responsible for Bush’s lousy appointments? Why doesn’t he fire people when it’s obvious they’re not doing their jobs?
Campaign contributions work.
I don’t know but my wild guess is that the talent pool for SEC staff is really limited — anyone who has the interest, intelligence, and competence to deal with such matters at a high level can get rich — so why would they want to be a bureaucrat with the SEC?
Reminds me of a revision of the old saw:
“Those who can’t do, teach; Those who can’t teach become govt. bureaucrats”
Sadly, you get my "post of the day".
When I was a broker some 20 years ago, I vividly remembered the uptick rule on shorting stocks. I can't imagine why that rule was suspended. Much of the unnecessary carnage could also have been averted by enforcing another rule by forcing traders to actually borrow the stocks they're shorting. Those two speed bumps were there for very good reasons.
Dubya is really going out with a whimper.
Damn, it seems like I do more due diligence on a freakin' compilation than the SEC did on a major Wall Street investment adviser.
For non-accounting folks, compilations are the lowest level of financial statements that CPAs prepare for their clients. Absolutely no opinion is offered by the preparer, unlike audited financial statements.
If you’ll go back and review press yammering when McCain called for Cox to step down, you’ll see that the press and many Republicans lined up behind Cox.
Fools all.
If you look through my postings at that time, you’ll see I was calling for Cox to be fired.
Now I want to see him fired, then sued for gross malfeasance and convicted in public of being a felony moron.
You probably do.
Have you seen these checklists of “due diligence” that funds of funds claimed to have done of their target hedge funds?
There’s NO way that Madoff’s fund passed these lists the FoF’s have put up. These checklists of “due diligence” are going to be a wonderful exhibit A for the lawsuits filed against FoF’s.
The SEC had to have their head lodged firmly and moistly past their sphincters to not catch the fact that Madoff wasn’t filing and reporting the required statements - and that a guy who claimed to be running so much money was providing hand-written 1099’s for end of year LP reports should have had people’s heads whipping around at the same time they’re asking “Whaaaaaa?”
“SEC Chairman Christopher Cox said he is “gravely concerned by the apparent multiple failures” by staff to look into claims about Madoff’s business and to seek formal authority to investigate.”
He was often talked about for Calif. Senator, or even for President, since he was on the surface the poster boy for the perfect conservative.
He sure managed to sit idly by while so many problems took place.
Bush with his MBA appointed a bunch of weak players, took their bad advice, delegated to them, and remained loyal to them; them to him.
Aside from his military adventures, his tax cuts and his appointment of two conservatives to the SC, Bush leaves quite a mess as he departs.
Aside from his military adventures, his tax cuts and his appointment of two conservatives to the SC, Bush leaves quite a mess as he departs.
At least he had the good judgment to put GEN Petraeus in charge in Iraq.
Bush was loyal to his subordinates, to a fault.
Eric Swanson, who worked for SEC from 1996 to 2006 as assistant director of compliance and examinations, is married to Bernard Madoff’s niece Shana, who was a compliance lawyer at the Madoff firm. Swanson is now a general counsel of Bats Trading, the third largest U.S. equity exchange.
An embarrassed Christopher Cox said he is probing whether SEC staff allowed swindler Madoff to walk away from numerous fraud complaints.... among the issues that Cox said are under investigation in a sweeping internal probe of the bungled case is that a Madoff family member was married to a onetime SEC official.
"The Commission has learned that credible and specific allegations regarding Mr. Madoff's financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the Commission for action," Cox said last night. "I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them. Moreover, a consequence of the failure to seek a formal order of investigation is that subpoena power was not used to obtain information, but rather information voluntarily produced by Mr. Madoff and his firm," Cox said......
Shana Madoff Swanson, Madoff's niece has been married to Eric Swanson, assistant director of the SEC's Office of Compliance, Inspections and Examinations' market-oversight unit, since 2006.
Shana Swanson is compliance attorney at Madoff's firm. Eric Swanson, according to the SEC, had overseen two inspections of Madoff's firm in 1999 and 2004. He left the agency in 2006.
SOURCE http://www.nypost.com/seven/12172008/business/madoff_family_ties_144527.htm
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.