Reply #7: SEC chairman says agency failed to probe Madoff [View All]

[ozymandius]

WASHINGTON – In a stunning rebuke, the Securities and Exchange Commission chairman blames his career regulators for a decade-long failure to investigate Wall Street money manager Bernard L. Madoff, now accused of running one of the largest Ponzi schemes ever.

On Tuesday night, SEC Chairman Christopher Cox ordered an internal investigation of what went wrong and offered a scathing critique of the conduct of his staff attorneys. He said they never bothered to seek a formal commission-approved investigation that would have forced Madoff to surrender vital information under subpoena. Instead, the staff relied on information voluntarily produced by Madoff and his firm.

Credible and specific allegations regarding Madoff's financial wrongdoing going back to at least 1999 were repeatedly brought to the attention of SEC staff, said Cox.

....

Cox's harsh assessment may have the effect of shifting questions away from the politically appointed five-member commission and placing blame squarely — if not solely — on the agency's staff for failing to aggressively pursue a massive fraud.

http://news.yahoo.com/s/ap/20081217/ap_on_bi_ge/madoff_scandal

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Gawds! Looks like we have more bad apples.