Bernard Madoff’s Alleged $50B Investor Fraud ‘a Debacle for the SEC’
The Securities and Exchange Commission received several warnings about the conduct of Bernard Madoff, accused last week of cheating investors out of $50 billion in a “giant Ponzi scheme.”
Madoff had a reputation for such spectacular investment returns that his conduct aroused some suspicion, but in many circles he had a good reputation. The SEC received repeated warnings about Madoff’s conduct and twice investigated his brokerage, the Wall Street Journal reports (sub. req.). “Each time, it blew its chance,” according to the newspaper.
In 2000 the SEC appointed Madoff to a 25-member advisory committee on market structure and sought him as a commentator for agency discussions. But two investigations followed, the story says. In 2005, the SEC found Madoff violated technical rules governing trade executions. A later 2007 probe based on a whistle-blower’s complaint was closed without charges.
Joel Seligman, an SEC historian and president of the University of Rochester, told the Wall Street Journal that the case is “a debacle for the SEC.”
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