Two possible reason for the SEC not to have investigated Madoff.
1) Payoffs to SEC staff.
2) SEC management did not want to investigate Madoff due to his ‘influential’ investors and the trouble they would created for the SEC staff. Did you see the who’s who of Madoff investors? Any attempt to have audited Madoff who have resulted in ‘politically correct’ lynching.
I vote for your door number 2.
Agree with you on both reasons, but you might throw a little incompetence in there for good measures.
“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.
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.