How did our friend Bernie manage to escape notice so long? Even in the face of letters to the SEC suggesting he was bent? Inquiring minds are beginning to wonder. Perhaps he had friends on the "inside"? Arthur Levitt, insists Arthur Levitt.
"We were not socially friendly," Levitt said. "I knew Bernie the way I know [former Citigroup CEO] Sandy Weill or [ex-Merrill Lynch chairman Dan] Tully. He received no special breaks from the commission."Levitt's comments come as the search for reasons why Madoff's alleged scam went unchecked for so long. As a result, the SEC, which oversees the activities of broker-dealers, has begun to face some tough questions.
At the center is Levitt, who earned a reputation as a supporter of the average investor during his reign as SEC chairman from 1993-2001. However some said Levitt may have ignored red flags when it came to Madoff.
So, we're taking bets. Insider, or not?
EX-SEC BOSS: NOT ME [The New York Post]
Posted by guest , Dec 16, 2008 10:11AM
SEC definitely looked the other way, dropped the ball again. That letter was a tip that they did not pursue.
Fire Chris Cox now, he is useless and incompetent.
Posted by guest , Dec 16, 2008 10:12AM
Arthur Levitt is a very corrupt person. He came across as a defender for the little guy, but like Mr.Potter, is a twisted, frustrated old man. I know him from serving on the board of Bloomberg LP. He is not what he seems.
Posted by guest , Dec 16, 2008 10:15AM
Take your choice:
1. "Insider" and didn't look too hard
2. Incompetent, and while he looked, he wasn't able to figure out what was going on
So - should the world look at me as corrupt, or as a blindfolded idiot? Decisions, decisions.
Posted by guest , Dec 16, 2008 10:20AM
3- the "scumbag or idiot" question is constantly raised on the st.-
there must be some sort of shakespearean or Greek tragedy about it, no?
Posted by Jesse , Dec 16, 2008 10:28AM
Schemes like this continue on because everyone is getting paid, directly and indirectly, not to look to hard.
http://jessescrossroadscafe.blogspot.com/2008/12/madoff-enablers-everyone-was-getting.html
Posted by guest , Dec 16, 2008 10:31AM
He reminds me of Eeyore on Winnie the Pooh.
Posted by guest , Dec 16, 2008 10:44AM
The SEC quickly needs to find another Martha Stewart to make an example of so they appear to look like they are a competent (and honest) regulatory agency.
Posted by guest , Dec 16, 2008 10:51AM
"It is often a mistake to attribute to malice that which can be explained by sheer incompetence."
Posted by guest , Dec 16, 2008 10:57AM
Bernie Madoff decided to pull off his scam for one reason - crime pays. I have 20 years experience in the securities business and I firmly believe the S.E.C. and FINRA both willingly ignore unlawful activity that is brought to their attention. I personally notified the S.E.C. of a scheme being pulled by publicly traded company that has bilked investors out of over $100,000,000 and the S.E.C. just yawned.
The best advice I can give anyone getting out of business school today is to work for the S.E.C. or FINRA and understand the basics of the oversight system than switch to the private sector and steal like crazy. Toss a $250 donation to both a Republican and Democrat in an election and get invited to fundraisers so you can shake hands with politicians and kick back some to various campaigns.
Until the willful ignorance of both FINRA and the S.E.C. is made painfully obvious and made a thing of the past, when in doubt - STEAL LIKE HELL!
Posted by guest , Dec 16, 2008 11:11AM
Ya think the SEC might be dirty? How could anyone get that idea?
http://tinyurl.com/5vdpkd
Posted by guest , Dec 16, 2008 11:22AM
I wonder how many SEC auditor wives and friends made some big money on Wall Street?
Probably all of them.
This whole situation stinks, if Obama lets this stand, then we know where he got his 600 million war chest.
Posted by guest , Dec 16, 2008 11:54AM
But wait! Leavitt went on TV the other day and said it there were "obvious red flags" in this case!
So is he lying now, or a few days ago?
Or just whenever his lips move?
Posted by guest , Dec 16, 2008 11:57AM
Can anyone explain to me how Bernie Madoff is alleged to have made money in this scam?
Posted by guest , Dec 16, 2008 12:10PM
13 -
What we know is that the money is missing. Exactly where it went and who walked off with what sums of money has yet to be discovered. Grab your popcorn and stay tuned.
Posted by guest , Dec 16, 2008 12:27PM
I think he probably got the benefit of the doubt, but I don't think they would have ignored evidence of outright fraud.
My suspicion is that he just had a dual set of books, and kept one locked away, while the other came in for the normal review.
Posted by guest , Dec 16, 2008 12:59PM
Don't blame SEC Enforcement. Lots of good people who want to do the right thing there. Problem is a CEO calls his pet politician (e.g. Schumer) who goes down to Washington and bitch-slaps the regulators until they back down. Google for a blatant example.....
Posted by guest , Dec 16, 2008 1:18PM
16 -
Blame S.E.C. Enforcement. I agree that the problem is that the corporate execs can and do lean on politicians to "place a call" and get things "taken care of." Part of the problem also rests with the Delaware Attorney General. I know of an example of corporate malfeasance that was overlooked while the Del AG arranged a $100,000 political donation from the corporation. Part of the problem is that when S.E.C. Enforcement is told not to look in a certain direction, they act like lapdogs and simply allow crap to happen.
If a cop sees criminal activity and intentionally looks the other direction in order to allow the illegal activity to be conducted, isn't that cop crooked?
If any of the "good people" within S.E.C. Enforcement actually wanted to do the right thing, they would speak up and blow the whistle. As currently constituted, S.E.C. Enforcement is part of the problem. Ditto FINRA and the Del AG's office.
Posted by diablo , Dec 16, 2008 1:22PM
@16
When people like Pitt and Cox are the heads of the SEC, is not even really necessary for a CEO to call people like Schumer. I exclude Donaldson from the list because he did try to bring some reform to the SEC, but got fired for it in mid-2005. Donaldson did fail to be effective on the naked short-selling issue, but that's not why he was fired.
Posted by guest , Dec 16, 2008 2:12PM
Donaldson????!!! Are you kidding me? At Schumer's request he tried his damned-est to neuter the State AGs because they are the only cops on the beat that can't be bought....well...they can, but march to a different drummer called "Political Asperations". Nearly succeeded too!
Posted by guest , Dec 16, 2008 2:43PM
One thing to remember with the SEC is that every so often, they have to go back to Congress, hat in hand, and explain why they should receive another round of funding. I realize in one sense that this is a good thing, since it makes the agency answerable to the public. However, it also can politicize the process. I remember during one of these episodes in the 1990s, Phil Gramm went out of his way to eliminate the office that receives and responds to investor complaints. The State AGs and your local police department don't have to do that, do they?