Are you crying? Are you crying? There's no crying in accounting!
Posted on 01/07/2009 3:55:03 AM PST by CutePuppy
The Securities and Exchange Commission's New York watchdog, under fire for failing to uncover Bernard Madoff's alleged $50 billion Ponzi scheme - despite a dead-on tip by a whistleblower - yesterday tearfully defended herself, arguing that she and the agency did the best job possible.
"Why are you taking a mid-level staff person and making me responsible for the failure of the American economy?" an upset Meaghan Cheung, with eyes tearing up, told The Post.
"I worked very hard for 10 years to make a career, and a reputation, and that has been destroyed in a month," said Cheung, who was the SEC's branch chief of the New York enforcement division during that unit's earlier probe of Madoff's brokerage business.
The 37-year-old has been singled out by whistleblower Harry Markopolos as the woman who failed to detect the scam despite his lengthy warnings. It was Cheung who signed off on a 2006 SEC investigation that effectively gave Madoff the all clear.
She said, "I was shocked" to learn last month that Madoff had been charged with - and confessed to - operating a massive Ponzi scheme at his Manhattan firm that swindled thousands of investors.
"I think it's a tragedy," said the married mother of two, who is a graduate of Yale University and Fordham University Law School.
But when asked if she would have done anything differently in her Madoff probe - which ended with "no evidence of fraud" - she demurred.
"I can't answer that," said Cheung, who left the SEC in September for personal reasons unrelated to Madoff. "If someone provides you with the wrong set of books, I don't know how you find the real books."
.....
"Cheung, branch chief in New York, actually investigated [Markopolos' claims] but with no result that I am aware of..."
(Excerpt) Read more at nypost.com ...
$100 says she still gets a bonus and a raise.
The SEC is not the FBI or the CIA -- meaning, they don't engage in offensive operations. So, if they show her bad books...
It's like your accountant. He works with what you give him.
Although perhaps someone should have taken Markopolis' suggestion of "Ponzi" to the FBI (including Markopolis himself).
Which means adding more laws or the rules and regulations governing markets (like the stupid and onerous Sarbox which cost billions of dollars to American companies and economy, as well as higher unemployment) - which is what Democrats are suggesting to do - would not make an iota of difference in this and/or similar cases. Lack of internal controls or lack of qualifications or lack of interest, or outside / inside political / personal / financial influence on staff, or occasionally luck, is what did and will always govern the outcome.
What really needs a deeper look is the "culture of corruption" of Mssrs Madoff and many of his investors, who invested with him precisely because they suspected that he was "cheating the system" (hint: most are rich and/or politically connected Democrats).
I Knew Bernie Madoff Was Cheating--That's Why I Invested with Him
Aww........Let me give you my job for a week ....and then tell me if I’m overpaid. :)
I agree with most of what you say but from personal observation I cannot agree that no government employee is ever fired or thrown in jail (for criminal behavior).
In a separate vein I would add the SEC has become a joke. We have now a lap dog. The removal of the up tick rule for short selling, the short selling of shares not borrowed and the lack of oversight of hedge funds has contributed to the melt down of the stock market.
The removal of the SEC and other government regulatory operations from the playing field began when the notion took hold in the Executive Branch that the regulatory government apparatus should be in a cooperative mode with their “clients” both in and outside the government. For example, the various Inspectors General offices which were set up in the late 70’s and which were originally charged with being “junk yard dogs” within their departments have eroded over time into becoming part of the Organizations management. Since this has happened under both parties, neither has the high road. The only way the system works is if those who run any of these departments are independent minded, honest and ethical. In this political climate, Diogenes’ lantern would need an infinite supply of oil to find one.
Vince
A lot of this sounds like the same cr%& the 911 commission stirred up. If I were a New Yorker, and if New York had any kind of stand-up representation on Capitol Hill from its congressional delegation, I’d be letting the world know just how abused New York has been by placing its trust and gold in federal hands this last 15-20 years.
-- "With the SEC, we'll never have search warrant authority to knock down somebody's door, and search his secret records, and nobody would want to live in a world where we could do that," she said.
See post #23, where I think real story should go. Many private interests had far less powers than even SEC's limited ones, yet everyone said that Madoff was never "transparent" with them on how he was getting the returns he claimed, and so they just would not do business with him, and warned others of same. Those that did business with him didn't do DD, or more likely overlooked it expecting to benefit from illegal frontrunning or insider trading from Bernie's private ECN exchange. Democrats all.
Shouldn't there be a copy of the report of the investigation detailing what was done? FOI?
This should be able to be compared to organization rules/standards, etc. Also there should be a document of some type including the names of the higher-ups who reviewed and signed-off on the report.
Yeah. He did it all himself, locked in his little office.
Uh, 0be comes to mind immediately using that very description.
Andrew Ladhe didn’t seem to think much of the Ivy League grads either. If you haven’t read his opus yet, check it out here:
http://www.portfolio.com/views/blogs/daily-brief/2008/10/17/hedge-fund-manager-goodbye-and-f-you
He loses his focus a bit at the end but it was still a good read.
Now, how could you be so cynical? :-)
Are you crying? Are you crying? There's no crying in accounting!
I wondered who was going to be the first to bring this one up. :-)
Good points! I don’t know that any of that was ever done? I’ve seen nothing to indicate an investigation was even done, just assurances by this lady that she didn’t drop the ball. Accountability is the missing ingredient in almost every government undertaking. I see no evidence of accountability in any part of this whole debacle.
...Yale University...check...therefore, must be smart.
...Fordham University Law School...check...therefore, must be hard-working and dilligent.
...married mother of two...check...must be a pillar of the community, it couldn’t be her fault.
Gee, I’m sorry, but if she were a former meth addict unmarried mother of three with a GED and an associates degree in accounting from ITT Technical Institute, who actually CAUGHT the fraud and helped to protect people’s life savings (not all the investors were “rich”), THEN I’d have respect for her.
There are consequences for signing your name on a document and attesting to its validity. Ask the people in the private sector about SOX, lady.
“I’m sure doing $8 bucks an hour SEC work she was hard pressed to add whistleblowing to her other paper pushing duties.”
Head of enforcement of the NY branch is kind of the center of the SEC. If she was as incompetent as it appears, higher-up players wanted her that way.
Though it was the wrong point and misdirection when he made it, McCain actually did say something right during his campaign—that Cox deserved to be fired.
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