So, here's one for you -- according to Joseph Cotchett (a lawyer for some of Bernie Madoff's victims), Bernie Madoff is surprised that his Ponzi scheme lasted as long as it did. The revelation came during a 4.5 hour interview, wherein Madoff revealed how the scheme worked and how securities regulators didn't catch him. Madoff did apologize, repeatedly, for the harm he caused victims.
The most interesting part of the interview is when Madoff described meetings with the Securities and Exchange Commission (SEC) while he was committing the fraud and how the SEC was unable to catch him, which didn't surprise him. These comments lead Cotchett to theorize that "many people" were negligent, including the government watchdog agencies. Let's not forget that the SEC has seen no evidence of wrongdoing by its staff as far as the Madoff situation is concerned. Nevertheless, the SEC has undergone many changes in order to continue to protect investors and the market.
Madoff himself noted that he was not surprised that the SEC did not catch his wrongdoings -- so what exactly is the SEC doing? Were SEC investigators looking the other way while the fraud was perpetrated, perhaps receiving a bit of a kickback in the process? I am sure that this will be the popular theory, but there is no proof that this took place (and there would be a paper trail, right?). Is it possible that the ever-vigilant workers at the SEC simply missed the fraud? I think this is the most likely scenario, especially since Madoff was hiding the scam for several decades. Perhaps I am making a big assumption, but simple incompetence could have allowed this scam to be perpetrated.
If a lawyer for some of Madoff's victims believes it was negligence, that's good enough for me. I wasn't affected, his clients were. Madoff is going to do his time, presumably in a room with a view so we don't get silly complaints about windows. He is going to be in jail for the rest of his life, and that is a 180-degree turn from his former lifestyle. Now, let's focus on making sure that this never happens again. Somehow there has to be guidelines in place to ensure that such a scam cannot get past regulators. I'm not sure what those guidelines should be, nor how they should be enforced -- that's not my job.
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Reader Comments (Page 1 of 1)
7-29-2009 @ 12:08PM
aliabassi1 said...
Wow - and this administration is looking for more regulation!?