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.
for The Daily Reckoning Australia