Crisis Diary as it unfolds ….

What was SEC doing?

This is a new piece of evidence WSJ has brought in light.

In Nov’2005 – yes, way back in two thousand and five – Madoff’s rival hedge fund manager Markopolos submitted this written complaint to SEC.

The title of the submission reads “The world’s largest Hedge Fund is fraud
In opening remarks he gives two likely scenarios and says scenario-2 is highly likely.
According to Markopoloas, What was this scenario-2?

Scenario-2 (Highly Likely) Madoff Securities is world’s largest Ponzi Scheme ….

Then the paper goes on to describe its premise in very compelling and coherent manner over next nineteen pages.

So what did SEC do?
SEC closed the case in Nov’07, two years later, and SEC’s conclusion can be found here.

Conclusion Reached:
The staff found no evidence of fraud. …..

Inefficient and insufficient gov’t oversight is one of the main reasons why market economy stands where it stands today – on the brink.

Thank you SEC, we’d love to have socialism back. We’d rather gov’t screwed us directly than gov’t colluded with corrupt market practices to screw us. Because in that case at least we have a visible filthy fist to fight with.

Update: (02-feb-09) Here is Markopolos prepared testimony to US finance committee

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December 20, 2008 - Posted by | News, Opinions | , , , ,

2 Comments »

  1. Great piece of work by WSJ…thanks for posting it.

    It’s becoming more and more obvious that the SEC just didn’t have much info on Madoff’s company with which to evaluate what it was doing.

    Whatever bits and pieces of info have been made available in the papers like WSJ, the motherlode of information on Madoff should be the SEC. Apparently not, though.

    Madoff’s company, Bernard L. Madoff Investment Securities, LLC, had to report to the SEC, like any securities firm. But according to the No More Corporate Secrets blog, there’s very little meaningful information in their online reports.

    Whatever information is contained in the auditor’s report is essentially unavailable, as the report is not posted in the SEC’s EDGAR database:

    http://nomorecorporatesecrets.blogspot.com/
    Mr. Madoff’s Secrets

    Comment by davidjs | December 20, 2008

  2. Is anyone investigating the SEC? $50 billion and the guy goes home, too bad he did not rob an 7-11 for 20 bucks…do not pass go, go straight to the big house.
    The lives that Madoff has effected (how many people lost everything), time to bring back old school justice…death penalty is the only option.
    Cheers.

    Comment by Don | December 21, 2008


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