Free Republic

The Justice Department is considering whether to prosecute Securities and Exchange Commission employees over the agency’s handling of a $557 million lease for downtown Washington offices that it could not afford and did not need, the agency’s inspector general said Wednesday. Inspector General H. David Kotz said he recently referred the matter to the Justice Department for potential investigation. The department requested relevant documents, Kotz said. Kotz said his referral focused on the back-dating of a document that was used to justify the lease. Kotz made that disclosure at the end of a House hearing in which lawmakers lambasted SEC...

Chairwoman Mary Schapiro's general counsel is accused of having a conflict of interest in the Madoff affair that Schapiro knew about. Two influential congressional leaders are directly challenging Security and Exchange Commission Chairwoman Mary Schapiro as a new Bernard Madoff scandal engulfs the agency, this one involving charges of conflicts of interest by her own general counsel. Pajamas Media has obtained a copy of the letter sent to the SEC chairwoman. Rep. Darrell Issa (R-CA) and Sen. Charles Grassley (R-IA) today sent a sharply worded joint letter to the SEC chief, demanding she explain why the she appointed General Counsel...

The Securities and Exchange Commission inspector general has agreed to a request from Rep. Darrell Issa, R-Calif., to probe the timing and political motivations of the SEC’s $550 million settlement with Goldman Sachs in a mortgage securities fraud case:m SEC Inspector General H. David Kotz agreed in April to a request from U.S. Representative Darrell Issa, a California Republican, that he probe whether politics prompted the lawsuit against Goldman Sachs. (Snip) Aside from the timing, many observers scoffed at the settlement. The $550 million settlement is pocket change compared to Goldman’s $162 billion in assets

Tonight the Inspector General of the Securities & Exchange Commission gives us Bernie Madoff in his own words — A jailhouse interview that Madoff granted to the SEC’s watchdog during his stay at Metropolitan Correctional Center in lower Manhattan on June 17. Madoff spent much of the interview slamming the SEC: “Everything the SEC did prior to 2006 was a waste.” He said that the inspectors who combed through his books found only “ridiculous violations.” Madoff adds that he never supplied false documents to the SEC, but that it was “amazing to me” that he didn’t get caught.

Madoff: It's 'Amazing' I Didn't Get Caught Sooner Posted By: Scott Cohn Senior Correspondent, CNBC 30 Oct 2009 | 07:26 PM ET Jailed swindler Bernie Madoff said it was "amazing" that he didn't get caught sooner in his multi-billion-dollar Ponzi scheme, and that everything the SEC did to investigate him prior to 2006 was a waste of time, according to a jailhouse interview he gave to SEC Inspector General H. David Kotz. Madoff also told Kotz that SEC Chairwoman Mary Schapiro was a "dear friend," although she "probably thinks, 'I wish I never knew this guy.'" For the SEC's Full...

The Financial Industry Regulatory Authority didn't fully probe Bernard Madoff's firm and repeatedly failed to investigate tips about R. Allen Stanford's alleged $7 billion fraud, an internal report found.

Securities and Exchange Commission Inspector General David Kotz has issued his long-awaited report on how the agency missed the Bernard Madoff Ponzi scheme. In a statement e-mailed to CNBC Monday afternoon, Kotz said the 450-page report is the result of an exhaustive, eight-month investigation. .....

The industry self-regulatory organization that was supposed to police the brokers at the Stanford Financial Group acknowledges that a Stanford employee alleged in 2003 that the company was running a Ponzi scheme, but the organization did not follow up on the claim based of its own policy, which has since been changed. The disclosure comes in testimony from Daniel Sibears, Executive Vice President of the Financial Industry Regulatory Authority, FINRA, prepared for a Senate Banking Committee hearing on Monday. In 2003, Stanford advisor Leyla Wydler alleged in an arbitration case that the company was "engaged in a Ponzi scheme to...

The Securities and Exchange Commission has promised to ban a controversial trading practice offered by stock exchanges that include Lenexa-based BATS Exchange Inc. Sen. Charles Schumer, D-N.Y., said in a release Tuesday that SEC Chairwoman Mary Schapiro told him in a personal phone call of the regulatory agency’s plans to ban flash trading, which momentarily lets certain traders know of stock orders before they’re released to the public market. BATS and Nasdaq have welcomed scrutiny of the practice. Last month, Schumer sent a letter to the SEC saying that it should ban flash trading or that he would introduce legislation...

A longtime aide to Madoff instructed two assistants to generate trading tickets, now believed to be bogus, the WSJ reports......Annette Bongiorno, a four-decade Madoff employee, would ask assistants to research daily share prices for blue-chips from the previous month or several months.......Using the data, Bongiorno would then instruct the assistants to generate "tickets" showing purported trades, which resulted in gains that were in line with Madoff's steady annual returns.......Madoff is expected to plead guilty Thursday to charges he carried out a massive swindle ......charges against Madoff are to include securities fraud, wire fraud, mail fraud and money laundering, according to...

SEC's enforcement head Linda Thomsen has stepped down .....Thomsen took over 2005 with high marks as top cop in the Enron investigation.......then it emerged her division failed to act on alleged con artist Bernard Madoff .....former SEC chair David Ruder said we should wait to pass judgment on the Madoff matter until the details of the 2006 investigation are clear.

WASHINGTON – House lawmakers on Wednesday accused the Securities and Exchange Commission of impeding their probe into the agency's failure to uncover the alleged $50 billion Bernard Madoff fraud. The clash between lawmakers and high-ranking SEC officials at a House Financial Services subcommittee hearing came after the man who waged a decade-long campaign to alert the regulators to problems in Madoff's operations denounced the agency for its inaction. ... In loud, angry exchanges, lawmakers threatened to issue subpoenas to SEC officials to compel their testimony in the case.

Mr. Markopolos Regrets His Failure to Persuade Investors; Tips for the SEC Harry Markopolos, the Boston-based investor-turned-investigator who for years warned regulators that Bernard Madoff was running a huge Ponzi scheme, has received pitches to appear on television shows, make movies and write books elaborating on his experience. Later this month, he is scheduled to appear before Congress to present recommendations to improve the Securities and Exchange Commission. But rather than enjoy a sense of vindication, Mr. Markopolos says he is miserable. He has trouble sleeping and is haunted by the apparent suicide of Thierry Magon de La Villehuchet, a...

Several top U.S. securities enforcement officials will testify at a Congressional hearing into Bernard Madoff's alleged $50 billion fraud, the Senate Banking Committee said Monday. The committee has called for testimony by the Securities and Exchange Commission's director of enforcement, Linda Thomsen, and the SEC's director of compliance, inspections and examinations, Lori Richards. It has also asked Stephen Luparello, the interim CEO of broker-dealer watchdog the Financial Industry Regulatory Authority, to testify. Both regulators have been criticized for missing one of the largest investment frauds in history. Incoming SEC chairman, Mary Schapiro, who was previously FINRA's chief executive, has said...

On the heals of the mortgage and investment banking collapse, the latest $50 billion fraud allegedly perpetrated by Wall Street mogul Bernard Madoff adds to the growing concern about whether incoming President Barack Obama will support effective regulation of the financial industry. Look at the nominees to see why I'm concerned. Obama last week tapped Mary Schapiro to lead the U.S. Securities and Exchange Commission. A former SEC commissioner, she now heads the Financial Industry Regulatory Authority, which oversees all U.S. brokerages selling securities. Because her agency should have caught Madoff, charges that she was asleep at the wheel raises...

...Obama was set on Thursday to name seasoned regulator Mary Schapiro to head the Securities and Exchange Commission...