Sunday, November 1, 2009
S.E.C.'s Madoff Investigation Exhibits
S.E.C. inspector general, H. David Kotz concluded in his full report that inexperienced and sometimes incompetent staff members had failed to adequately investigate numerous warnings and tips about the enormous Ponzi scheme.
New exhibits consist of 6,157 pages of interviews, letters, e-mail messages, telephone records and other background material gathered during a 10-month investigation of how the commission handled, and mishandled, numerous tips and warnings it received about Madoff over the years. His full report,released last month, found the agency had received six substantive complaints since 1992 — and botched the investigation of every one of them. He found no evidence of any bribery, collusion or deliberate sabotage of those investigations.
Among the exhibits are transcripts or reports on more than 160 other interviews conducted during the extensive internal investigation, including conversations with four former S.E.C. chairmen, a number of former top officials at the agency and dozens of current and former staff members involved in the various botched investigations examined in the original report.
E-mail messages, letters, memoranda, telephone records and other bits of evidence are also included in the Madoff trove were posted on the agency’s Web site
While the exhibits add no new charges to Mr. Kotz’s unofficial indictment of the nation’s top market regulators — the worst documented failure in the 75-year history of the S.E.C. — they do provide a vivid sense of the tensions, confusions and petty squabbles that derailed each failed inquiry.
The paperwork gathered from the agency’s files also tell a tale of unseasoned, poorly managed people who were uncertain about what to do and unwilling to ask for help. In numerous instances, employees would share their doubts about Mr. Madoff in notes or e-mail messages, but then never take steps to press for more information.
In a memo from March 2004, several senior S.E.C. staff members reported that “it seems clear” that Mr. Madoff had “absolute discretion” over the accounts of his clients. Nevertheless, they said, “Bernard Madoff himself has categorically denied being an investment adviser.”
Go to Madoff Exhibits from the S.E.C.
Article from NY Times
Posted by Stuart Rosenthal