Free Republic

The fraud investigation of Wall Street money manager Bernard L. Madoff took unusual twists Wednesday as the U.S. attorney general removed himself and the Securities and Exchange Commission looked into the relationship between Madoff's niece and a former SEC attorney who reviewed Madoff's business. The developments reflect growing criticism that Wall Street and regulators in Washington have grown too close. Madoff himself has boasted of his ties to the SEC. The question of Madoff's connection to regulators goes to the heart of the investigation of the alleged $50 billion fraud, SEC Chairman Christopher Cox told reporters. Congress jumped into the...

The unusual nature of how Bernard Madoff's alleged $50 billion Ponzi scheme surfaced -- with a confession from the key figure himself -- is complicating a high-profile investigation by the Securities and Exchange Commission. ..... Typically, investigators begin with a tip or whistleblower and cut deals with lower-ranking employees to build a case against the suspected mastermind of a fraud. In this case, investigators started with a confession from the mastermind, Mr. Madoff, according to a government affidavit, and they are trying to work backward to piece together what happened. People familiar with the investigation say the Madoff firm's records...

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