Bernard Madoff Fraud Shows How Incompetent The SEC Really Is & Offers A How To Guide For Wannabe Frauds
Posted by Timothy Sykes on Mon 15th of Dec, 2008 07:50:54 AM
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Now you guys know I have a special place in my heart for the SEC, an incredibly incompetent regulatory body that I lovingly call Osama bin SEC (due to their hatred of financial freedom and love of terrorism)…
Despite all my ranting and them pissing off just about every poor wannabe stock trader–read less than 10,000 people, but really millions who never even understand the crime being committed against them–nobody really wants to piss the SEC off because they are basically Big Brother.
Well, with the $50 billion fraud of Bernard Madoff just shows how truly incompetent they are…and more people should write about it so as to get some change going on up in there.
From a good Bloomberg article on the subject:
Madoff, 70, who had advised the SEC how to regulate markets and donated regularly to politicians, was arrested Dec. 11 and charged with operating what he told his sons was a long-running Ponzi scheme in the New York-based firm’s business advising rich people, hedge funds and institutions. His ability to avoid detection may fuel debate about the SEC’s effectiveness and the adequacy of its resources for policing money managers.
“Given what the SEC claims is the magnitude of the fraud, this is something you would hope an inspection would have uncovered,” said Mercer Bullard, a University of Mississippi law professor and former mutual-fund attorney at the SEC. “It’s hard to imagine a fraud of this alleged size not being accompanied by significant and pervasive compliance problems.”
Uhhhhh, yeah!
Instead of getting anywhere close to a $50 billion fraud, Big Incompetent Brother SEC prefers going after small-time crimes–think a few hundred grand–like that pathetic excuse for a headline case for insider trading against Mark Cuban.
We keep ragigng on all the leveraging loving morons in charge of running all these companies into the ground, when we have even bigger problems when our financial police force is a national embarassment.
Again from Bloomberg:
Barry Barbash, a former head of the SEC’s investment management division, said the agency has tried to focus its inspections on money managers who pose the biggest risks. The regulator uses criteria such as which securities a firm is buying and who its clients are, said Barbash, a partner at Willkie Farr & Gallagher LLP in Washington.
“Given the state of SEC resources and given the way that they go about determining whether an inspection is necessary, it wouldn’t surprise me that a newly registered firm wasn’t inspected,” Barbash said.
Any suspicions about Madoff may have been dampened because of his association with industry groups, watchdogs and politicians.
He sat on a committee of academics, regulators and executives formed in 2000 by then-SEC Chairman Arthur Levitt to advise the agency on new stock-market rules in response to the growth of electronic trading. Madoff has led the trading committee at the Securities Industry Association, Wall Street’s biggest trade group, and served as chairman of the Nasdaq Stock Market.
So wannabe fraudsters take note–hey, live the good life on other people’s dime (isn’t that all of Wall Street?), just pretend to be want to help the industry, make powerful connections, get good name investors, donate, do the whole social thing and Big Incompetent Brother SEC will be fooled. (Just make sure to save lots of excess fraudster cash around in case of bear markets where the risk of blowing up is heightened….oh yeah, and never monologue or confess. Duh!
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