Inspector General Admits SEC Pretty Much Sucks At Its Job

The SEC’s inspector general has released a jailhouse interview in which his royal Ponziness, Bernie Madoff himself, explains that he got away with his scheme because the SEC basically sucks.

From the NYT:

In the interview, Mr. Madoff said that the young investigators who pestered him over incidentals like e-mail messages should have just checked basics like his account with Wall Street’s central clearinghouse and his dealings with the firms that were supposedly handling his trades.

“If you’re looking at a Ponzi scheme, it’s the first thing you do,” he said.

Those simple steps, he added, could have revealed years earlier that he was running the largest Ponzi scheme ever, a crime that has now dragged the S.E.C. into the worst scandal in its 75-year history. “It would have been easy for them to see,” he added.

We are reminded of a Frontline episode about Madoff in which they cover how someone entirely unrelated to the SEC or Madoff figured out the Ponzi scheme and was ignored.

Way to go, SEC!

Lapses Helped Scheme, Madoff Told Investigators [NYT]

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  1. leprechaunshawn says:

    Just another glaring example of government ineptitude. I cannot believe that people want these idiots in charge of our health care.

    • NitrousO says:

      @leprechaunshawn: Why are you trying to change the topic of the post?

    • GMFish says:

      @leprechaunshawn: “Just another glaring example of government ineptitude.

      I don’t see this as ineptitude. The money was flowing and no one wanted to rock the boat. It’s more about the fear of sticking your neck out than stupidity.

    • logicalnoise says:

      @Traveshamockery: I bet the majority of the people who are satisfied have medicare which is run of course by said government.

    • ben says:

      @leprechaunshawn: Who wants the SEC in charge of our healthcare?

    • leprechaunshawn says:

      @leprechaunshawn:

      The basic point that I’m trying to make here is “pay attention to the news”. Whether its online, in a newspaper or the local news at 10. It seems way to often that we hear about some government agency screwing up at what they are supposed to. Government agencies have proven over and over again that they will use poor judgement and it will be expensive. Why would socialized health care be any different?

      • Naame says:

        @leprechaunshawn: Yeah I am with you bud. I hear that government run Tricare they give to those guys in the military really sucks. I’m so glad I don’t have to put up with that…/facepalm

      • TheWillow says:

        @leprechaunshawn: Interesting, the basic point that I’m trying to make here is “pay attention to the news”. Whether its online, in a newspaper or the local news at 10, it seems way too often that we hear about some corporation screwing over the consumer. Entire industries have proven over and over again that they will use short-sighted judgment and it will be expensive. Why would for-profit health insurance be any different?

    • leprechaunshawn says:

      @leprechaunshawn:

      I just can’t wait until you all get your government run health care. Mark my words – This will just be another example of politicians promising “A” and delivering “B”.

      • Naame says:

        @leprechaunshawn: If the whole promising “A” and delivering “B” happens it will be due to those in Washington who do not believe in introducing a public option in the first place and are trying to kill it or water it down. That or in the future due to those who start cutting its funding.

        These are the same people who are on the phone with their insurance lobbyist friends every day, but only manage to make time for their voters once every 6 years.

      • Skipweasel says:

        @leprechaunshawn: And that differs from the worldwide current experience of politics in what way?

    • Kogenta says:

      @leprechaunshawn: Health Care aside, would a private company have done much any better?

      Realistically you’d probably have the same sort of dead weight driving the company. I mean, as long as the profits are flowing, you don’t want to start interfering too much. I suppose the only difference is that the government would probably have had to have bailed out the company once it was discovered how incompetent at their job they were.

    • parkj238 says:

      @leprechaunshawn:

      leprechaunshawn
      3:26 PM
      @ben: I don’t want any government agency in charge of life and/or death.

      So, you’d rather have a for-profit corporation, whose fiduciary duty is to their shareholders (not to the healthcare consumers) make decisions on life/death.

      Smart!

    • leprechaunshawn says:

      @leprechaunshawn: Consider this story.

      Meet LaKeisha. She is a 20 year old single mother of 4 children who is also addicted to crack. She became addicted to crack at 15 years old and a year later had her first child. Over the next 4 years she had 3 more kids with 3 more “baby daddy’s”. Because of her crack addiction and 4 bastard children she cannot find a job. Now she is pregnant with her fifth child from a fifth father. After all these bad decisions we want to “reward” her with free health care.

      Meet Brent. He graduated high school at the top of his class. Went on to and graduated from college. At the age of 22 he got his first job in his chosen field. It’s a good job too. He makes a strong salary and his health benefits are excellent. He started saving money in college and now has enough to make a down payment on a house. He is now 30 years old with a wife and kid. He has a good job with good benefits and owns a home. After all the good choices he has made we want to tax the hell out of him so that LaKeisha and her 5 children can enjoy health care that she did nothing to deserve.

      You cannot strengthen the weak by weakening the strong.

  2. Clumber says:

    Interesting… That is an interesting thought process… I am not as guilty because the SEC should have been looking closer.

    Hmmmm….

    Does it follow, then, that I am not as guilty for stealing your car because the cops should have been watching it closer?

    Sorry ‘the Ponz’ – yer still scum.

    • Nakko says:

      @Clumber: Yeah, he’s just saying the authorities could have (would have) caught him far earlier if they were looking in the places they were supposed to look.

      This could be a good opportunity to get real expert advice on how to spot these early from now on. Get him to spill all his tricks of the trade!

      • Clumber says:

        @Nakko & squinko:
        Ahhh… as an IT person professionally, I should have spotted the “neener” tone without assistance, even on a Monday. In my 1st read I got that he was laying out excuses, “yeah but…”, and reducing his own culpability. After seeing your posts, I re-read with the neener tone and I agree it makes more sense that way.

        I still say get the boiling tar and the feathers….

  3. edrebber says:

    Just a bunch of hogs feeding from the public trough. No accountability. No work ethic.

    • tailstoo says:

      @edrebber: Exactly the problem! If these people were held accountable (like the rest of us working stiffs) we wouldn’t have these problems! Or at least not nearly so many!

  4. mazzic1083 says:

    Can I just say mad props on the pic in this article? Had me chuckling for sure

  5. White Speed Receiver says:

    This is part of the problem. YOUNG INVESTIGATORS. Even someone like me, who’s been in accounting for a few years, isn’t capable of ferreting out everything. And the government isn’t going to pay someone who is smart and experienced enough what they’re worth to do it. So the SEC will keep hiring a) people with experience who couldn’t find their ass with both hands and a map, let alone fraud, or b)people out of college who may be smart, but don’t have the technical experience to find things.

    Ideally, part of Mr. Madoff’s sentence should be to help train the SEC on how to identify what he did so it doesn’t happen again.

  6. exploded says:

    I love this biography of Christopher Cox, which is currently still posted on the SEC’s website. My favorite part “During his tenure at the SEC, Chairman Cox made vigorous enforcement of the securities laws the agency’s top priority…”

    Really Chris? That was your top priority? Really?

    [www.sec.gov]

  7. carlos_the_dwarf says:

    The guy who blew the whistle on Madoff years ago basically said the SEC investigators he spoke to were all none-too-bright young lawyers who didn’t know the first thing about business or math. He claims they simply didn’t understand what he was trying to tell them.

  8. whateverthisis says:

    @Traveshamockery: Go Gators!

  9. giggitygoo says:

    @Skipweasel:

    We’re well off topic here, but what the hey. There’s lots of different perspectives on why one would be against socialized medicine. (Philosophical objection to government redistribution, fear of slippery slope of government control of what treatments people can receive, etc.) However, I think the largest factors in most opponents thinking are 1) Cost (In the context that the US is already running huge deficits and socialized medicine will be one more entitlement to pay for), 2) The fear that government controlled health insurance will lead to less choice for most Americans. (Both choice of treatments and choice of doctors) and 3) Socialized medicine will increase care for the poor at the expense of the middle class. (e.g. Universal coverage for those with no insurance, but lower cancer survival rates for those that already have coverage)

    Also, private medicine existing in parallel with socialized medicine creates other problems. Notably that the very best doctors will all go private-only, leaving the best medical care exclusively for the rich. Not to mention that this also separates the political class (all rich and able to afford private care) from the consequences of the socialized medical system they create, which will be borne mostly by the middle class.

  10. hi says:

    @Skipweasel: Because all the problems with the current system are the parts that the govenment runs already. They say it’s broke but it’s their parts are the part that are broke and instead of fixing their problems and making the current system better they want to take over the whole system which will be a disaster.

    My personal reason for not wanting government run healthcare: They will make it manditory to buy their healthcare. Then if you don’t pay for it they fine you, then when you don’t pay the fine they throw you in prison. That is not freedom and this country did not become the great country it ‘was’ by being like other countries.

  11. Traveshamockery says:

    @squinko: I said Division I.

  12. Traveshamockery says:

    @squinko: And I forgot the /sarc tag…

  13. thehouserules says:

    @squinko: whoooooosh!

  14. humphrmi says:

    @Naame: I don’t see what he can gain by redirecting public anger. His company is in receivership, his fortunes are gone. He is in jail, quite likely for the rest of his life. The public would not be able to help him, no matter how forgiving they are.

  15. Naame says:

    @humphrmi: I tend to agree, but that doesn’t mean he is thinking that. If he is in a position where his lawyers/friends even stand a chance at helping him at all then redirecting public anger will do nothing but help.

    Also note that I also said it only part of the potential incentive. The remainder could simply be that he realizes that he no longer has any reason to keep his trap shut about much which I also believe is a big part of it. Either way (or both ways) he has nothing to lose right?

  16. exploded says:

    @econobiker: I heard that piece (or one very similiar, yay NPR!), and they were really harsh on him, which is entirely justifiable.

  17. Mary Marsala with Fries says:

    @Traveshamockery: Interesting study, since over 20 percent of Americans under 65 aren’t insured at all.

    The fact that government can get broken and corrupted does NOTHING to prove that private industry can’t, or doesn’t, get just as broken or corrupted or more. It’s bad logic on a first-grade level, like saying that apples taste great so oranges must suck.

    And of course, once you admit the obvious fact that BOTH types of institution are flawed and susceptible to abuse, you have to ask (regarding both the financial and health sectors), “Who’s doing it now, and are they doing it so horribly that someone has to step in and stop them?”

    And in both cases, the answer is YES.

    Case closed.

  18. Covertghost says:

    @Traveshamockery: 89% of america doesn’t even have health care lol.

  19. MrEvil says:

    @giggitygoo: Wow dude, you totally need to be on last comic standing because your last paragraph was a blooming RIOT! The best medical care in the country is already exclusively for the haves. The only time the Have-nots get that kind of care is when there’s some little warm & Fuzzy story about a little kid with a rare genetic disorder, they do that once in a while to give the unwashed masses a brief glimmer of hope.

    Just you go to a Hospital and see what kind of care you get when you tell them you have no insurance.

    And you forget something else, you ALREADY pay for indigent care anyway in the form of higher insurance premiums and higher copays and higher rates for treatment.