In his stunning statement last night, SEC Chairman Cox said that he had
directed a full and immediate review of the past allegations regarding Mr. Madoff and his firm and the reasons they were not found credible, to be led by the SEC’s Inspector General. The review will also cover the internal policies at the SEC governing when allegations such as those in this case should be raised to the Commission level, whether those policies were followed, and whether improvements to those policies are necessary. The investigation should also include all staff contact and relationships with the Madoff family and firm, and their impact, if any, on decisions by staff regarding the firm.
The SEC’s Inspector General is H. David Kotz, who was named the SEC’s new IG in December 2007. Since that time, Kotz has been incredibly busy, investigating and drafting lengthy reports in the Aguirre/Pequot matter, the W Holding/Bear Stearns matter, and others.
Kotz now takes on a new, hugely important, and high-profile investigation into why the SEC failed to pursue credible and specific allegations regarding Mr. Madoff’s financial wrongdoing going back to at least 1999.
I spoke briefly today with Mr. Kotz, and he confirmed that Chairman Cox has asked him to take on the investigation, which is now his number one priority. He says there is still uncertainty about many of the details, such as how long it will take, how many people it will take to accomplish the investigation, and whether he’ll need to bring on new people to assist his team.
Kotz said that one idea he is considering is to break the investigation into discrete pieces and issue reports on these pieces on a rolling basis (rather than holding all of his findings until the end and issuing one massive report, as he did in the Bear Stearns matter). He also emphasized that he plans to be personally very active in the investigation.
Mr. Kotz:
Listened to you at the committee today. I am impressed as I am sure many people are.
My two cents:
A. Madoff did not lose or spend the billions.
B. The billions were given to a country to which Madoff as a devoted Zionist would want to support.
C. SEC should not identify the Madoff sons as informing heroes. That obviously was a Madoff ruse to afford protection for his family.
D. The Madoff family must be put in financial jeopardy to squeeze information from them.
E. Hire this retired tough ass intelligence officer at $1.00 year to interview or interogate subjects.
F. FBI as professional investigators should be at forefront of this criminal investigation.
G. If no one is fired from SEC, you will lose the confidence you need to be successful.
Please. if you don’t know as much as you claimed not to know today when testifying then you should be put in a limo, driven home have, the keys to your office and your id cards stripped from you and not paid another penny. anything due on your expense account should be billed directly to you. and it all should be made very public. this is how to straighten this behavior out.
I am appalled with Mr. Kotz performance today at the Committee hearings going on today. How could anyone be selected to be of IG for the SEC and be so completely incompetent.
I’ve worked a lifetime and have seen his ilk before. They are do nothing, answer nothing, promise everything, produce nothing. They attach their name to any of the good work done in their department by others, thus taking credit for other’s work.
But when seated in front of congress and forced to answer simple questions Mr. Kotz promised everything, but answered nothing.
To my mind, in the hour that I watched the committee hearings, Mr. Kotz is the epitome of the classic “Empty Suit”.
I agree with Toni Scott’s view above. Take the man home and drop him off and get someone that can do the job.
The job, by the way is, from the SEC press release 2007-251:
As the SEC’s Inspector General, Mr. Kotz will conduct independent and objective audits, investigations and inspections to detect waste, fraud and abuse, and promote economy, effectiveness and efficiency. He also will issue fact-based reports in accordance with professional standards.
That’s to detect waste, FRAUD and ABUSE!
All David Kotz could say was ” I plan to look into that “….
What kind of answers are those to every question.
He should give back his salary for the year he spent doing nothing, and be fired.
If he was in the private sector he would be! Or should be!!
As most of those watchdog types are, all talk and no bite!
I expect the same from Mary Shapiro also!
As an Inspector General, he hasn’t inspected anything-including procedures and business flow within his own establishment. Pathetic. A McDonalds clerk could perform at this level.
Kotz should be the first one fired. His assistant second, etc, etc.
Then start at the top with the next worthless division (Enforcement?) of the SEC, and continue in a Stalinist like purge until there’s nobody left in the building but the janitor.
Then start again.
I’m already starting to feel sorry for middle managers in the SEC. The scapegoats aren’t coming from the top, that’s already been established.