Thursday, March 11, 2010
"What was it like to spend nine years trying to persuade the [SEC] that Bernard Madoff was a fraud, only to learn that the agency thought he was perfectly reputable? For nine years I was the SEC's dormat. Now you're triumphant, a hero in investment circles who exposes the SEC as the most futile of agencies in your new book, 'No One Would Listen.' It was a trip though the twilight zone. ... They've reorganized. They redisorganized the enforcement unit. I actually approve of that. I think Robert Khuzami, the new head of the enforcement division, has got fire in his belly. Are you saying the SEC under Schapiro is about to catch fraud on Wall Street? She has the wrong staff. They're a bunch of idiots over there. What do you mean? The five commissioners of the SEC are securities lawyers. Securities lawyers never understand finance. They don't have the math background. Of you can't do math and if you can't take apart the investment products of the 21st century backward and forward and put them together in your sleep, you'll never find the frauds on Wall Street. ... They're overlawyered. They're poisoned by lawyers", my emphasis, Deborah Solomon interview with Harry Markopolos (HM) at the NYT, 28 February 2010, link:
HM is too kind to the SEC. It is worse than full of idiots. It is corrupt from top to bottom. That it is overlawyered and lawyers are innumerate is old news. See my 22 December 2007 post: http://skepticaltexascpa.blogspot.com/2007/12/us-injustice-system-at-work.html.
The SEC staffers' incentives are all wrong. That's why idiots like Meaghan Cheung work there, 18 January 2009: