As If Any More Abuse Of The SEC's "Work Ethic" Was Possible...
The SEC Inspector General, David Kotz, must be on a different payroll/career track than most of his colleagues at the SEC, because the blasting report he just released should finally force legislators to reconsider their approach to regulation of a market that ever since the SEC-Wall Street complex merged, has generated exclusive synergies for the 10 or so investment banks that dominate regulation (sorry Mary, we call it like it is) at the expense of everyone else.
From the report:
As the foregoing demonstrates, despite numerous credible and detailed complaints, the SEC never properly examined or investigated Madofi's trading and never took the necessary, but basic, steps to determine if Madoff was operating a Ponzi scheme. Had these efforts been made with appropriate follow-up at any time beginning in June of 1992 until December 2008, the SEC could have uncovered the Ponzi scheme well before Madoff confessed.
And here is Mary's doing what she does best: provide more excuses for the inefficacy, cronysim and lack of results that apparently a $1 billion budget buys these days.
Statement on the Release of the Executive Summary of the Inspector General's Report Regarding the Bernard Madoff Fraud
Chairman Mary L. Schapiro
U.S. Securities and Exchange Commission
September 2, 2009
Since Bernard Madoff's fraud came to light last year, the Securities
and Exchange Commission's Inspector General has been investigating why
the agency failed to detect it. His report makes clear that the agency
missed numerous opportunities to discover the fraud. It is a failure
that we continue to regret, and one that has led us to reform in many
ways how we regulate markets and protect investors.
In an effort to provide a full accounting as quickly as possible, we
are releasing the Executive Summary of the Inspector General's report,
to be followed by the 450-page report in the coming days.
When I took office in January in the wake of the Madoff fraud, I
decided that we would not simply wait for the Inspector General's
report before taking action. Instead we have been reviewing our
practices and procedures, addressing shortcomings, and implementing the
The findings contained in the report reinforce my view that the many
changes we have made since January will help the agency better detect
We have streamlined our enforcement procedures and are putting more
experienced staff on the frontlines. We also have bolstered our
inspection program, started to revamp the way we handle hundreds of
thousands of tips received annually, begun to hire new skill sets,
increased internal training, and sought more resources to keep pace
with financial fraudsters.
Although numbers cannot tell the entire story, already we have filed
more than twice as many emergency temporary restraining orders this
year related to Ponzi schemes and other frauds, as compared to the same
period last year.
In addition, we have proposed new industry rules that will better
protect clients of investment advisers by mandating independent reviews
to assure that a client's account contains the funds that the
investment adviser says it contains. And, we have sought legislation to
enable us to compensate whistleblowers for providing substantial
evidence of wrongdoing. [A more complete list of the reforms undertaken
is available at http://www.sec.gov/spotlight/secpostmadoffreforms.htm.]
Since becoming Chairman, I have been impressed by the expertise and
dedication of the men and women at the SEC and their willingness to
embrace the changes that we have undertaken to better protect
investors. I am confident that together we will succeed in our efforts
to revitalize the agency and help bolster investor confidence.
If nothing else, this conclusively proves that at least one person is impressed by the "expertise and dedication" of the SEC men and women.