SEC Employees Aren't Fired For Missing Madoff's Massive Ponzi Scheme

At the Securities and Exchange Commission, it seems that totally dropping the ball on Bernard Madoff's massive is not a fire-able offense. The Wall Street Journal reports, "Eight Securities and Exchange Commission employees have been disciplined over their handling of the $50 billion Bernard Madoff Ponzi scheme, but none were fired, an agency spokesman said Friday. A ninth individual left the agency after receiving notice of a proposed disciplinary action, according to the spokesman."

After the scam was revealed—by Madoff's sons—the SEC Inspector General released a report, "Despite numerous credible and detailed complaints, the SEC never properly examined or investigated Madoff’s trading and never took the necessary, but basic, steps to determine if Madoff was operating a Ponzi scheme." The SEC was warned six times, but no one did anything, even when they noted his actions could be "indicia of a Ponzi scheme." Instead, investigators ignored basics like checking Madoff's clearinghouses and accounts.

No wonder bankers don't give a shit about SEC regulations!

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

By Jen Chung in News on November 11, 2011 5:51 PM

Comments [rss]

TheDoctorWhoCuresCancer

Does the disciplinary action include not watching porn on the SEC computers for two weeks?

theevilerone

Here's what really happened:

The one employee that they determined that they had legal basis to fire, quit before they could.
The other eight's disciplinary action included "demotions, suspensions, reductions in paygrade, and paycuts."

You also have to realize that the SEC does not come in and do a detailed review of everything a company does on an annual basis - that's what auditors are for. In Madoff's case, the massive collusion extended to the auditor, who was a sole practicioner, (or else a total moron). That guy went to jail. If the SEC were to be a watchdog to double as auditors - well, open up your pocketbooks people, because that takes serious money.

me4

Isn't that what madoff supposedly had?

nicemarmot

Wasn't he buddies with some of the higherups at the SEC? Of course they're not going to investigate their friend, he couldn't possibly be running the biggest ponzi scheme in history!