“‘You are both a captive regulator and a failed regulator,’ Harry Markopolos said of the SEC in highly anticipated testimony to a U.S. House subcommittee.
Mr. Markopolos detailed his nine-year effort to alert federal regulators about Madoff, who is accused of engineering one of the largest swindles in U.S. history. The SEC was ‘unable to understand’ the complex financial instruments involved in the alleged fraud, Mr. Markopolos said, and regulators weren’t interested in pursuing investigations against influential firms and investors.”
(Via Wall Street Journal Online.)
Whistleblower ignored. Surprise, surpirse. This is what you get when you have people who hate government, running government. The SEC had no defense either on this.
The group of SEC officials declined to speak specifically about the Madoff case, but said they were doing their best to protect investors.
“I think I speak for everyone when I say we hate fraud,” said Linda Thomsen, director of the SEC’s division of enforcement, said.
Lawmakers, however, weren’t impressed.
“Your job is to prevent fraud, not to hate it,” Mr. Kanjorski said, alternately describing the SEC’s testimony as “oatmeal” and a “traveler’s guide” that didn’t address the issues exposed by the Madoff case.