"In the torrent of criticism that Mr. Markopolos and lawmakers heaped on the SEC and its senior staff members, some complaints were serious--that the agency lacked the expertise to tackle major fraud by big players and had no systematic way of dealing with whistle-blowers. ... [Lawmakers] had been far more riveted by Mr. Markopolos testimony, which at times seemes to enter verbal territory more often explored at organized crime hearings. He referred to his fear that he would be killed if Mr. Madoff learned of his investigation. At one point, noting his experience in military intelligence, he described an offer he made to 'go undercover' for the SEC--a proposal that was rebuffed. ... While one lawmaker asked whether this all wasn't 'a little paranoid,' others agreed that Mr. Markopolos was wise to be cautious, given the scale of the fraud he was trying to bring to light", my emphasis, Diana Henriques, 5 February 2009, at the NYT, link: http://www.nytimes.com/2009/02/05/business/05madoff.html.
Wednesday, February 18, 2009
SEC Faulted, Lacks Gulag
"Fraud investigator Harry Markopolos blamed the [SEC's] 'financial illiteracy' for failing to heed his warnings about money manager Bernard Madoff. ... 'There was an abject failure by the regulatory agencies we entrust as our watchdogs,' Mr. Markopolos said in prepared remarks for the meeting. ... Markopolos had harsh words for the SEC. Officials asked few questions and made little effort to understand the derivative instruments Mr. Madoff said he was using, according to Mr. Markopolos. His experience blowing the whistle to the SEC led him to conclude 'that the SEC securities' lawyers if only through their ineptitude and financial illiteracy colluded to maintain large frauds such as the one to which Mr. Madoff later confessed'," Michael Crittenden at the WSJ, 4 February 2009.
"Rep. Paul Kanjorski, D-Pa., the House Financial Services subcommittee's chairman, vented frustration after the SEC's acting general counsel said the five officials appearing before the panel couldn't answer lawmakers' questions about the Madoff case because its under investigation. ... Kanjorski accused the agency of impeding the panel's investigation, calling it an 'abuse of authority.' ... Linda Thomsen, the agency's enforcement director, said the SEC takes the Madoff case very seriously, but asserted there were confidential areas related to an ongoing investigation that couldn't be publicly discussed", Marcy Gordon at the Houston Chronicle, 5 February 2009.
That SEC lawyers are financially illiterate is part of their calling. They are lawyers. Look at Congress. See my 22 December 2007 post, link: http://skepticaltexascpa.blogspot.com/2007/12/us-injustice-system-at-work.html.
This is nonsense. These SEC clowns should be held for contempt of Congress or obstructing a Congressional investigation, 18 USC 1505.
I am grateful "the agency" has "no systematic way of dealing with whistle-blowers". Why? Because the "agency" would model it after another "agency", Stalin's NKVD, and build a whistle-blowers gulag! That's how things work in the NY-Washington Axis. See my 10 January 2009 post about the UN, link: http://skepticaltexascpa.blogspot.com/2009/01/un-whistle-blowers.html. I'm not surprised these hearings sounded like they dealt with "organized crime". Didn't they? Bring back Estes Kefauver, (1903-1963), link: http://en.wikipedia.org/wiki/Estes_Kefauver! How bad is the SEC? Look at Joe Jett's case, my 8 August 2008 post, link: http://skepticaltexascpa.blogspot.com/2008/08/joe-jetts-alive.html. The SEC already has Andrey Vyshinskys. They're called adminstrative law judges. The SEC as currently run, is an "agency" that operates on the other side of Alice's looking glass.