Madoff Astonished SEC Didn’t Verify His Claims

Reddit

But let us turn to America’s equivalent of the FSA – the SEC.

Front page in The Washington Post: “The Madoff Files…A Chronicle of SEC Failure…”

According to the Post, Madoff was “astonished” that the SEC didn’t bother to verify whether he was actually doing the billions of dollars worth of trades he claimed to be doing.

In response, the SEC says it “doesn’t have the resources” necessary to keep an eye on “the exploding number of financial firms.”

And according to today’s International Herald Tribune, Senator Schumer has suggested a way for the SEC to increase its budget by 75%. The idea is to turn it into a kind of tax farmer…with the right to earn money directly from the industry it is supposed to regulate. There’s an idea for you – a very bad one. It would give the SEC more money to waste…allowing it to hire more people to meddle in the marketplace…giving investors more illusions that they are playing ‘on a level playing field’…and ultimately corrupting the financial sector even more than it already is.

Which brings us back to our original question: what was the SEC doing?

The Madoff group was very suspiciously doing billions in trades with remarkable profitability and consistency. Every trader in New York knew something was up. What was so intriguing to SEC eyes…when they weren’t keeping their eyes on Madoff?

We can tell you. Us! Your editor and his colleagues. No kidding. We’ll give you the full story next time. Promise.

Bill Bonner
for The Daily Reckoning Australia

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Reddit

Comments

  1. What was the SEC doing Bill?, the same I suggested many months ago about the FSA,… out to a very long lunch, all expenses paid , or over staffed and under worked, asleep at the wheel, lost the keys to the office. Its all a bit sus isn’t it?.

    shortchanged
    January 30, 2013
    Reply

Leave a Reply

Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.
If you would prefer to email the editor, you can do so by sending an email to letters@dailyreckoning.com.au