The “problem occurred when I made commitments for too much money and then I couldn’t put the strategy to work,” Madoff told SEC Inspector General H. David Kotz in a June 17 interview described in a report yesterday. “It was my mistake not to just be out a couple hundred million dollars and get out.” ..... Kotz faulted the agency for inadequately pursuing tips, assigning inexperienced staff to conduct reviews and failing to seek trading records that would have revealed the scam. ..... “I had a European bank, I was doing forward conversion, they were doing reverse conversion,” Madoff said without elaborating. He said when the strategy went bad, he thought, “I’ll just generate these trades and then the market will come back and I’ll make it back. And it never happened.” SEC investigators have said Madoff and employees at his New York-based firm, Bernard L. Madoff Investment Securities LLC, used a variety of ruses, such as creating sham trading records, to avoid detection of the fraud. Madoff told Kotz that SEC Chairman Mary Schapiro was a “dear friend” and that he knew former chairman Arthur Levitt “very well,” according to the interview exhibit. ..... SEC Commissioner Elisse Walter was called a “terrific lady” by Madoff, who said in the interview that he knew her “pretty well.” ..... Though the report describes dozens of contacts between Madoff and senior SEC officials, it doesn’t find that managers improperly influenced or interfered with inquiries. Nor did Kotz find that an SEC employee’s romantic relationship with Madoff’s niece had any affect on the agency’s examinations. Instead, Kotz said the SEC failed to scrutinize Madoff during a 1992 probe of a firm that funneled him money. Years later, employees failed to scrutinize his consistently strong profits, didn’t press harder when they caught him in lies and abruptly ended an examination to focus on mutual-fund abuses. ..... Bernard L. Madoff said his multi- billion-dollar Ponzi scheme started when a legitimate investment strategy went bad and he tried to cover up, according to an interview with the U.S. Securities and Exchange Commission.
Maybe David Kotz could look at his SEC report and find many of the same "failures" that he found in SEC investigations.
Madoff just can't stop lying. He should just admit he learned all his tricks at his parents' knees.
MADOFF'S MOM HAD STOCK-TRADING TROUBLES, TOO
Jan 17, 2009 By ANDY SOLTIS, NY POST
EXCERPT The feds did manage to crack down on a suspicious Madoff business - when they drove Bernie's mother out of the stock-trading firm more than 40 years ago. Sylvia Madoff was targeted by securities watchdogs in 1963 for failing to file documents for the brokerage she allegedly ran out of her Queens home, Fortune.com reported yesterday. But the brokerage might have been a smokescreen to cover up a shady business run by Madoff's father, Ralph, who had his own tax troubles at the time.
The SEC announced August 1963 that it began a probe of 48 broker-dealers, including Sylvia Madoff, who were listed as running Gibraltar Securities of Laurelton, Queens, and another firm, Second Gibraltar Securities, also of Laurelton.
Five months later, the SEC dropped its case against her, Second Gibraltar and several other firms in an apparent deal not to press charges if they got out of the business. "The firms conceded the violation," the SEC said.
The brokerage may have been linked to the Madoff family's money trouble. At the time, the Queens home had tax liens of more than $13,000 for unpaid federal taxes owed by Ralph Madoff and three other people. Fortune suggested Ralph Madoff registered his own stock business in his wife's name because of his tax problems. Both of Bernard Madoff's parents died in the 1970s.
http://www.nypost.com/seven/01172009/business/madoffs_mom_had_stock_trading_troubles___150543.htm