Congress to open inquiry on SEC’s failure to pursue case against Madoff

Rep. Paul Kanjorski

Rep. Paul Kanjorski, chairman of the House Financial Services subcommittee on capital markets, said today that the House is planning to convene an inquiry into the failure of securities regulators to uncover an alleged $50 billion Ponzi scheme by Bernard Madoff after Congress returns on Jan. 6.

As discussed here in detail, SEC Chairman Cox stated Tuesday evening that he is “deeply troubled” by the SEC’s findings that “credible and specific allegations regarding Mr. Madoff’s financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the Commission for action.” “Unfortunately, these events have only further weakened already battered investor confidence in our securities markets,” Kanjorski said in a statement reported by Reuters. “And they have raised even more troubling questions about the effectiveness of our regulatory system,” he said.

Kanjorski said the panel will look into why the SEC as well as other regulators and market participants failed to detect “substantial evasions” that harmed innocent investors and charitable groups, and that the inquiry is intended to help Congress “craft a strong, effective and modern regulatory system.”

1 Comment

  • Robert W. Konecki
    Posted January 6, 2009, 11:01 pm 11:01 pm 0Likes

    Its about time the SEC/CFTC had some responsibility for these undetected crimes. They cant seem to do anything and are paper tigers to go after anyone who flees the USA. They say thats not our department, and by the time its handed over to the FBI etc the guy is gone, and doing the fraud again somewhere else.
    The bottom line is protect yourself and your money as the Govt. agencies are inept!

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