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News Wrap: SEC Penalizes Employees for Failure to Spot Madoff Scheme

November 11, 2011 at 12:00 AM EST
In other news Friday, the Securities and Exchange Commission penalized eight employees for failing to spot Bernard Madoff's Ponzi scheme over 16 years. The agency said the measures ranged from pay cuts to suspensions, but no one was fired. Also, a unity government emerged in Greece and economic reforms gained traction in Italy.
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HARI SREENIVASAN: Wall Street finished the week on a high note after heavy losses earlier in the week. The Dow Jones industrial average added nearly 260 points to close back above 12,000 at 12,153. The Nasdaq rose 53 points to close at 2,678. For the week, the Dow gained nearly 1.5 percent; the Nasdaq fell a fraction of a percent.

The Securities and Exchange Commission has penalized eight employees for failing to spot Bernard Madoff’s Ponzi scheme over 16 years. The agency said today the measures ranged from pay cuts to suspensions. No one was fired. Madoff’s fraud was finally exposed in the financial crash of 2008. It cost investors at least $50 billion. Madoff himself is serving a 150-year prison term.

There were new signs of political progress in Europe today, after a unity government took office in Greece and economic reforms made headway in Italy. But it remained unclear if the worst of the continent’s debt crisis is over.

We have a report from Richard Edgar of Independent Television News, reporting from Frankfurt, Germany.

RICHARD EDGAR: In a week when mammon has had few answers, the Greeks turn to God as their new prime minister is sworn in — in Italy, too, rocked by the debt crisis, the beginnings of change as senators approve the first austerity cuts of many.

France and Germany are at loggerheads over whether to allow the European Central Bank to bail out failing countries. The bank is the only institution able to step there, say the French. The Germans, who would bear the brunt of any losses, object.

ANDREAS DOMBRET, German Federal Bank: One thing is clear. What we don’t have is confidence in the financial markets. And confidence will only regain if there are convincing answers to the problems. And the root of the problems is the fact that we have too high sovereign debt.

RICHARD EDGAR: Day after day, headlines across Europe have called into question the fitness of the European Central Bank, the stability of the entire financial system and what has become for many the symbol of Europe, the euro in their pocket. There are signs of hope, but Europe’s problems are far from over.

GEORGE OSBORNE, conservative member of parliament: It’s a very, very difficult and dangerous situation in the Eurozone. Britain is impacted by what is happening. There’s no doubt that growth in Britain, jobs in Britain have been hit by what is going on in the Eurozone.

RICHARD EDGAR: There is talk this week of a two-speed Europe. The worry is that the crisis will create one slow-speed economy.

HARI SREENIVASAN: President Obama spoke today with the leaders of Germany and France and with the president of Italy. And Treasury Secretary Timothy Geithner issued a statement saying it is crucial that Europe move quickly to restore financial stability.

There was more violence in Syria today, as security forces turned their guns on protesters after Friday prayers. Activists said at least 16 people were killed. Amateur video showed running battles in the streets of the capital, Damascus. It also showed security forces dragging the body of a man down the street. It’s estimated more than 250 Syrians have been killed just in the last two weeks. And Human Rights Watch accused the Syrian government today of crimes against humanity.

Heavy new fighting also swept across Yemen. Government forces pounded the city of Taiz with tank and artillery shells. At least 14 people were killed there — 120 miles away, thousands of people in Sanaa held competing rallies for and against the Yemeni regime. There were no reports of violence. The Yemeni uprising against President Ali Abdullah Saleh has raged for nine months.

The Palestinian bid for U.N. membership went to the U.N. Security Council today, but it appeared to have little chance of winning approval. From all indications, the Palestinians were short of the nine votes needed on the 15-member council to be recommended for admission. In addition, the U.S. has pledged to veto any resolution supporting Palestinian membership, if it seems likely to pass.

Those are some of the day’s major stories.