SEC: 'No more Madoffs'; New plans from agency

NY POST ^ | 9/11/09 | Dow Jones

[Liz]

SEC watchdog H. David Kotz told the Senate Banking Committee he will issue detailed reports outlining steps the SEC should take to help prevent another colossal Madoff failure. Two reports will outline "concrete recommendations" to enforcement and examinations divisions, which bungled five separate probes into Madoff. A third report will analyze SEC's examinations division failure to look into the investment adviser unit of Madoff's firm after he was forced to register it in 2006.

[Liz]

EXCERPT---NY POST STAFF REPORT Madoff in his own words tells employees how to break the law; caught on tape teaching associates how to fool government regulators. On a bombshell audio recording, Madoff can be heard coaching people at a hedge fund on how to get around snooping SEC regulators. "You know, you don't have to be too brilliant with these guys because you don't have to be," Madoff said during the audio recording when referring to Securities and Exchange Commission investigators in 2005. "They ask you a zillion different questions and we look at them and sometimes we laugh, and we say are you guys writing a book?" Madoff added. "You know, because these guys they work for five years at the commission then they become a compliance manager at a hedge fund now." Madoff, 71, pleaded guilty to operating a $64B Ponzi scheme defrauding thousands of investors. The SEC has also come under pressure for not uncovering Madoff's scam, which dates back to the late 1980s, sooner.

[poobear]

For 10 years, yes TEN years whistle blowers reported the illegal dealings of Madoff and Company. The SEC needs to be investigated.

[Wally_Kalbacken]

But, you have to admit, part of the brilliance of the Madoff scheme was in not trading. When the SEC looked for exceptional trades, unusual volumes (in advance of announcements, etc.) they were never going to find Bernie’s scheme, because, post 1993, he wasn’t trading.

As to specific allegations - I’d love to know what the SEC people did if (and when) they were ever presented with individual monthly statements (which were purely fabricated). There would have been no way to reconcile those against actual trades linked to the Madoff entity that was the scam. Hard to believe that opportunity never presented itself in the last 15 years of his crime.

[CPOSharky]

Greedy smart people will always find a way to take money from greedy dumb people.