Contact Us

Case Review Form
*    Denotes required field.

Describe accident or indicate name of drug or device

   * First Name 

   * Last Name 

   * Email 

Phone 

   * Please describe your case:

What injury have you suffered?

For verification purposes, please answer the below question:
+
=

No Yes, I agree to the Parker Waichman LLP disclaimers. Click here to review.

Yes, I would like to receive the Parker Waichman LLP monthly newsletter, InjuryAlert.

please do not fill out the field below.


Madoff Report May Stay Sealed

Sep 22, 2009 | Parker Waichman LLP

In addition to bilking countless investors out of their life savings, the massive Ponzi scheme, orchestrated by imprisoned, disgraced financier, Bernard Madoff, has also thrust some Securities and Exchange Commission (SEC) weaknesses into the spotlight.

Madoff is now spending 150 years in prison for orchestrating a Ponzi scam that is estimated to have cost duped investors an incomprehensible $65 billion. And, recently, the SEC has come under fire for apparently missing warnings that something was terribly amiss with Madoff’s investment advisory business.

Former SEC chairman Christopher Cox called for an investigation of the agency this December, following Madoff’s now famous arrest. The recently released report discusses, in part, the agency’s failure to notice or prevent Madoff’s Ponzi scheme. Cox, asked, for example, why the agency believed allegations made through the years about Madoff to be “not credible,” reported FOX Business.

As part of the investigation, SEC Inspector General H. David Kotz, looked at how the SEC handled its dealings with Madoff, said FOX Business previously. According to a prior Bloomberg.com piece, the investigation looked at how the agency failed to detect the historic fraud since 1992 and faults the SEC for not fully going after tips, having inexperienced staff handle reviews, not looking into unbelievable and sustained profits, not pushing when Madoff was clearly caught in lies, and not pursuing trading records that would have pointed them to the scam. It seems the SEC cut an examination short, shifting gears to work on another issue; did not release many hundreds of exhibits that are noted in the report, one of which was Madoff testimony from this June; and released the report after business hours ended prior to the recent extended Labor Day weekend.

Now, the Business Insider is reporting that the Financial Industry Regulatory Authority (FINRA), said to have close ties to Madoff, might not release the report to the public. It is expected that a decision will be made this week, said Bloomberg.com, which noted that the 21-member board handled the review following Madoff’s confession. One anonymous source, said Bloomberg.com, argued that according to the committee’s chairman, the document is expected to be released.

Recently, in what some were calling a strange twist of fate, an SEC enforcement official, whose relatives entrusted millions to the scheme, received a tip in 2005 about the Madoff scam, which was received anonymously by the Office of Internet Enforcement via email, and was one of no less than six “substantive complaints” that went uninvestigated over 16 years, according to Kotz, said Bloomberg. Kotz’s statement was released in advance of his testimony before the Senate, reported Bloomberg.com.

The investments, which were made by two of the SEC official’s family, were indicated as a footnote in the report—numbered at some 457 pages—and did not disclose the official or the losses, added Bloomberg.com. Katz said that the official involved was not part of the investigation into Madoff’s activities.

The tip said, quoted Bloomberg.com, “I know that Madoff (sic) company is very secretive about their operations and they refuse to disclose anything. If my suspicions are true, then they are running a highly sophisticated scheme on a massive scale. And they have been doing it for a long time…. After a short period of time, I decided to withdraw all my money (over $5 million).”


Other articles
Parker Waichman Accolades And Reviews Best Lawyers Find Us On Avvo