The Securities and Exchange Commission learned about what it describes as one of the largest securities frauds in history when Bernard L. Madoff volunteered his confession, raising questions about the agency's ability to police the financial marketplace.Bang up job SEC, really top shelf work. Who even needs you around overseeing everything, the market will just police itself. No need to act on tips explicitly explaining the exact type of fraud Madoff was engaged in, why he's a respected businessman, is friends with all the people in charge, and has a "good reputation". That means he's on the level.
The SEC had the authority to investigate Madoff's investment business, which managed billions of dollars for wealthy investors and philanthropies. Financial analysts raised concerns about Madoff's practices repeatedly over the past decade, including a 1999 letter to the SEC that accused Madoff of running a Ponzi scheme. But the agency did not conduct even a routine examination of the investment business until last week.
Thankfully we have dedicated public servants like former SEC Chairman Arthur Levitt to tell us all that it isn't his fault and to shut up and go away already. "The SEC going back to its formation, and the Justice Department going back to its formation, are never adequate to crime at its time. It's simplistic to look back and say that this was the SEC's fault." Really? Ponzi schemes are so complex that that the SEC is behind the curve? I was under the impression that they were one of the simplest things to investigate, all you have to do is ask for proof that their holdings are what they claim they are. The Washington Post is under this assumption too.
I bet I'm wrong though. This was a mistake of too smart criminals and probably too much regulation, not totally negligent and non-existent oversight. Who could have foreseen this ever happening?
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