The SEC's Madoff Mess
The Bernard Madoff investment scandal has brought to a head concerns that Chairman Christopher Cox's Securities and Exchange Commission has not been exactly aggressive in policing the market. Republican presidential candidate John McCain, you may recall, said he would have fired Cox.
So when Cox said yesterday that it was "deeply troubling" his agency had failed to catch perhaps the largest Ponzi scheme in history, our Readers Who Comment are asking in effect if it wasn't the fox guarding the chicken coop. Some attack Cox directly, some of them just blame the bureaucracy generally. All are angry. And huge losses have been suffered by investors, including many Jewish nonprofits.
Columnist Steven Pearlstein addresses a long-held concern by critics of the financial world -- that the accountants and rating agencies who are supposed to provide review basically depend on fees from the reviewees, an inherent conflict of interest. He proposes turning these firms "into something akin to a regulated public utility." Not all of our readers agree with that either. Not a happy story in the midst of this economic crisis.
First to the comments on the news story.
We'll start with Jaymand, who wrote, "Maybe it would be easier to just tell us what the SEC has done right??"
And shadocat said, "Deregulation: Gotta love it. Middle class Americans are losing their homes, and the silence is deafening. Now that WEALTHY people have had their portfolios yanked from under them we'll get some action from Congress."
kyoto27 wrote, "...This story needs more investigative reporting from The Post, and others to expose the SEC for what it has become--a shill for hedge funds, brokers/dealers."
Tupac_Goldstein sais, "The tragedy is that people rely on the federal government. The feds have failed at everything except our armed forces and some aspects of the space program..."
mike21 wrote, "One could make the assumption that payoffs to SEC personnel were made. Very very bad."
keen-observer suggested that "This SEC needs to be razed to the ground... While the SEC was focused on trying to destroy Ms. [Martha] Stewart and her company over a small-time personal stock sale, they completely ignored the "largest Ponzi scheme in history"... What a screwed up agency!"
sharronkm asked, "Why hasn't Christopher Cox been fired?! In fact, clean house at the SEC. They are a disgrace. I knew the Cox selection would be like the fox guarding the chickencoop. Just another George Bush mess!"
liveride said, "It's starting to sound like a true Shakespearean Tragedy. All it needs is the final Atonement of the guilty and the complicit."
NMonrad wondered, "Has anybody bothered to ask how many other hints or allegations of fraud the SEC have also failed to react upon? It surely would be a marvelous coincidence if there were only one, and that unique case is now out in the open..."
IndependentVoter2 wrote, "Yet another manifestation of George W. Bush's shabby legacy to the country and to the world"
And Pearl77 said, "More republican "economics" in action. Stuff the regulators, look the other way, let banks, corporations and Wall Street run wild in the pursuit of profits by any means possible no matter the impact on "average Americans", the environment, the economy or anything else..."
But jeannebee said, "First, for those who want to make this a "Republican" problem: Note that the first known investigation was in 1999. That hint leads me to think it was STAFF that botched this, not agency heads. And why should we be surprised to learn that a federal agency was just pushing papers around rather than fulfilling its oversight function?..."
tgolamb wrote, "This message is brought to you by the same ignorant government who among other things, used faulty intelligence to get us to make a preemptive strike on Iraq. See a pattern here?"
And we'll close this section with markandbeth, who said that Madoff "...was a babe in the woods compaired to FDR and all the Senators and Representative who have came after him. Social Security is a Ponzi that makes what Madoff did look like childs play ...."
All comments on the SEC article are here.
Now to the comments on Pearlstein's column.
summicron1 said, "with the SEC admitting now that, 9 years ago, it ignored credible warnings about mr madoff, one has to consider the possibility of more than simple incompetence -- at some point we need to say "these people did this on purpose."..."
jrwute42 wrote, "bottom line is greed;people who figured returns were bogus thought it was from insider trading and they were happy to be in on it"
Thependulumswings wrote, "Madoff supposedly made 50 billion dollars disappear. Why would a judge think 10 million dollars would insure that he showed up for a trial?"
We'll close with JackN who addressed a central suggestion of Pearlstein's in writing, "...Converting the accounting firms and rating agencies into public utilities makes sense, given their crass dereliction of duty which led to the debacle. But consider how virtually every accrediting organization is self-regulating and depends on user fees to sustain operations. The model assures mediocrity, if not outright incompetence..."
All comments on Pearlstein's column are here.
December 17, 2008; 7:31 AM ET
Categories: Economy Watch , Federal Employees , Madoff , SEC | Tags: Madoff, SEC
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