| Page 2 of 2 < |
SEC Broadens Its Probe Of Failures in Madoff Case
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
Kotz is also looking at whether the SEC violated its own policies by not conducting timely reviews of Madoff's firm, and whether Madoff's membership on SEC advisory panels influenced the agency's decisions regarding his company.
Additionally, Kotz said he's expanding the probe to look more broadly at the SEC's Department of Enforcement and Office of Compliance Inspections and Examinations. He said he will study whether the agency's procedures to handle complaints are sufficient, whether there are gaps in policies and whether there is adequate internal collaboration.
Katz said he is asking for documents and e-mails related to Madoff by Jan. 16 and plans to interview agency officials as part of the investigation.
The SEC was warned on several occasions by Boston investment professional Harry Markopolos that Madoff's firm probably represented the world's largest Ponzi scheme. In such a scheme, some investors are paid with other investors' money. Allegedly using such a technique, Madoff was able to produce double-digit returns to investors year after year.
Markopolos was scheduled to testify yesterday before the House panel but asked to postpone his testimony, saying in a letter that he was ill and needed more time to prepare. Kotz said he plans to interview Markopolos in the near future.
Lawmakers yesterday were searching for people in the government to blame for the scandal.
"I want to know who is responsible for protecting the securities investor because I want to tell that person or those people whose job it is that they suck at it," said Rep. Gary L. Ackerman (D-N.Y.). "This is a spike in the heart of the investment community that makes America run."
Separately yesterday, the Senate Banking Committee announced that it is examining the Madoff case and has asked the SEC for documents relating to warnings the agency received.
"The Banking Committee is examining this case to determine how so many people could have been deceived and how such a massive fraud could have gone undetected for so long," Sen. Christopher J. Dodd (D-Conn.), chairman of the committee, said in statement. "American investors deserve an explanation and the responsible parties must be held accountable."
