SEC Lawyer Warned About Madoff in 2004

A lawyer with the Securities and Exchange Commission had sounded a warning in 2004 about irregularities at the financial management firm run by Bernard Madoff, but her superiors asked her to put aside concerns to work on an investigation of the mutual fund agency.

The lawyer, Genevievette Walker-Lightfoot, found inconsistencies in information provided by Madoff, and sent her superiors an e-mail suggesting questions that should be posed to his firm, the Washington Post reports. The questions zeroed in on activities that turned out to be elements of his fraud. Madoff was sentenced to 150 years in prison last week for operating the Ponzi scheme.

Walker-Lightfoot, a lawyer in the SEC's Office of Compliance Inspections and Examinations, had previously worked at the American Stock Exchange. She left the SEC in 2006 after alleging she had been subjected to hostile workplace discrimination. A person familiar with the complaint told the Post Walker-Lightfoot achieved a favorable resolution of the complaint.

The SEC investigated Madoff’s firms at least five times over nearly 20 years, including in 2007 after rival Harry Markopolos complained that Madoff’s improbable returns were likely the result of a Ponzi scheme, the Post says.