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The SEC's Billion Dollar Bust
I read an interesting story in The New York Times recently. It stated that the Securities and Exchange Commission “missed signals” of the Bernard Madoff scandal. Madoff, a 70-year-old former chairman of the NASDAQ stock market, embezzled the fortunes of many investors upwards of $50 billion.
What gets me is how the SEC states that it missed signals to bring this issue to light. The Commission determined that they received credible information concerning Mr. Madoff at least 9-10 years ago. That's not exactly missing a signal. That's pure negligence.
Christopher Cox, who has served as chairman of the SEC since August of 2005, stated that he was “gravely concerned” about the multiple failures to investigate the previous allegations. It would appear that the SEC was simply caught off guard with respect to the widespread chaos of Mr. Madoff's financial dealings. But how can someone be caught off guard if they've been hearing about a situation for almost a decade?
The SEC was not merely getting caught off guard. They seemingly looked the other way. Reports came out stating that there were, in fact, people who came told the SEC that Mr. Madoff was a person of interest who should be looked at. Did the SEC do it? No.
The magnitude of this loss is staggering and will be looked upon for years as one of the greatest wealth scandals of our time. International markets, charities and close personal relationships were all damaged due to this.
I cannot imagine how devastating this type of loss must be to those who placed their personal earnings in the hands of Mr. Madoff.
The SEC needs to be investigated itself, and new leadership must be brought in. It is an absolute disgrace to see a situation of this magnitude unfold, only to see that the officials given the task of making sure it didn't happen in the first place fell asleep at the wheel.
Accountability and integrity must be restored to our financial structures on Wall Street, along with real oversight and leadership in Washington DC. We've seen far too many times now the repercussions that happen to us as a nation when we don't hold individuals accountable for their actions and the ripple effects it sends throughout the world when we fail to take action.
Is the SEC partly to blame for this?