The Wall Street Journal writes:
In 1999, trader Harry Markopolos wrote that “Madoff Securities is the world’s largest Ponzi Scheme,” in a letter to the SEC. More recently, multiple SEC inquiries and exams in 2005 and 2007 found only minor infractions.
I listened last night to a radio interview with Markopolos (Marko! Polos!), who said that he had sat down with Madoff as part of his research for a newsletter recommending opportunities to investors. Markopolos said that there were so many red flags raised by Madoff’s presentation that he can’t imagine anyone giving his fund a clean bill of health — if they had actually done their job.
These people missed so many warning signs, they might as well have been L.A. Times editors reviewing a Chuck Philips story.
The Wall Street Journal says “the SEC’s failure is business as usual. The real news would be a case when the SEC did prevent a fraud.”
I’m not necessarily saying the President should fire the SEC Chair (although he could — he could remove him as chair, and fire him entirely if there is cause). But balls were dropped. Tom Blumer has more, and reminds investors not to trust the chuckleheads at the SEC.