SEC Blasted On Capitol Hill Over Madoff Affair
Once again, the Securities and Exchange Commission (SEC) is in the hot seat. This time, Harry Markopolos, the former investment manager who tried for years to warn U.S. regulators about disgraced money manager Bernard Madoff, is behind the grilling. On Feb. 4, Markopolos testified before lawmakers that the SEC did nothing to stop Madoff’s alleged $50 billion Ponzi scheme, despite the many red flags that literally were presented at the agency’s doorsteps.
Markopolos is the whistleblower who first lifted the veil surrounding Madoff and his so-called investing business back in 1996. At the time - as well as in later years - Markopolos presented strong evidence of Madoff’s illegal activities to the SEC, but no actions ever were taken.
House lawmakers are now leveling harsh criticism on the SEC for its failure to stop Madoff and prevent investors from losing some $50 billion. During the course of Wednesday’s testimony, some lawmakers threatened to issue subpoenas to SEC officials who would not answer questions regarding Madoff because of what they said is the agency’s ongoing investigation.
Meanwhile, Markopolos, who is now a fraud investigator, says it is unlikely Madoff acted alone in his crime.
Markopolos also told lawmakers on Wednesday about other Ponzi-type schemes that he has uncovered.
As for Madoff, he remains free on bail, living in his luxury, $7 million Manhattan penthouse. On Feb. 4, the trustee in charge of liquidating Madoff’s businesses said that nearly $1 billion in cash and securities has been recovered to date. Investors have until July 2 to file their claims.
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