In one of the most anticlimactic and unsatisfactory resolutions of an SEC matter in recent memory, the SEC settled its civil fraud charges against Bernard Madoff yesterday. In short, the resolution of the SEC case bars Madoff from associating with any broker, dealer or investment adviser. As is customary in SEC settlements, Madoff expressly did not admit or deny the allegations of fraud against him.
Given that Madoff is almost certain to spend the rest of his life in prison after pleading guilty to 11 criminal charges related to his massive Ponzi scheme, his inability to associate with a broker/dealer in the future is unlikely to have any impact on him.
The insignificance of the settlement was reinforced by the lack of even a press release by the SEC. Professor John Coffee of Columbia University Law School commented to the Financial Times that
“This shows a certain bureaucratic mindedness… I would think the SEC would be too embarrassed to claim any victory. This settlement seems to me to show the stubborn, phlegmatic persistence of a bureaucrat.”