SEC Revamping Whistleblower Policy After Bungling Madoff Tips

The SEC -- after notoriously whiffing on several attempts to bring self-confessed $50 billion Ponzi scammer Bernie Madoff to their attention -- said today that it is working to improve how it handles tips from whistleblowers.

The SEC has hired the Center for Enterprise Modernization, a federally funded research and development center operated by the MITRE Corp., to improve the way it handles leads about possible securities violators.

Money market manager Harry Markopolos repeatedly warned the SEC that he believed Madoff was running a dirty operation -- and provided legit documentation -- but the SEC never charged Madoff.

"As we continue to reinvigorate our enforcement efforts as an agency, it's vitally important that we move very aggressively to improve staff's use of tips and complaints from investors and whistleblowers," SEC Chairman Mary Schapiro said in a statement. "This comprehensive review will help us identify and improve areas within the agency where gaps or lack of communication may cause breakdowns that prevent us from ensuring swift and vigorous enforcement."

The SEC gets "hundreds" of tips per year, the agency said.

You can read the entire SEC release here.

-- Frank Ahrens
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