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I mean, really. What good is a regulatory agency that cannot catch the bad guys? It's like having a sheriff who doesn't understand the laws enough to enforce them. Or who's a lot dumber than the crooks. Or chooses to turn a blind eye to a powerful offender. Only thing is, the SEC was warned about schemers like Bernie Madoff nine years ago. Why did they do nothing?
Think about it. If Bernie's Ponzi had been discovered and seized back then, maybe more people would have a chance of seeing at least some of their money back. As things stand now, they've recovered perhaps $100 million of the $50 billion lost. Of course, that could be due to the ineptitude of the folks doing the searching. If it's the same people that were supposed to be doing the enforcing, it's hopeless.
The first guy to blow the whistle back in 2000 on Madoff, Harry Markopolos, testified before Congress last week that the SEC is a totally incompetent agency that "roars like a lion and bites like a flea". Considering the agency recently settled with Madoff without making him admit any wrongdoing, his words have the ring of truth. At any rate, he certainly seems to understand what happened more than the SEC does.
"I'm saying that if you flew the entire SEC staff to Boston, sat them in Fenway Park for an afternoon, they could not find first base," Markopolos said, adding that he was in fear for his life after the SEC didn't act on his information. His theory now is that the Russian mob and Latin American drug cartels are somehow involved with Madoff's scheme because he was able to trace funds to offshore accounts. He also says the SEC didn't have the smarts to nail Madoff, and that it "vigorously ignores" tips on wrongdoings, especially those committed by Wall Street's power hitters.
After Markopolos testified, the SEC's enforcement director was called before the Congressional subcommittee, where she claimed she couldn't discuss the case because it was still being investigated. Nice excuse. One Congressman in particular wasn't buying it. Gary Ackerman of Queens told the director, "Your value to the American people is worthless. We thought the enemy was Bernie Madoff. I think it's you." Looks like it's time to clean house over there. I hope they don't have the kind of golden parachutes Dick Grasso did.