Get your popcorn ready.
Following last week’s release of the SEC IG’s Madoff report, the U.S. Senate Banking Committee has announced that on Thursday, September 10, 2009, it will hold a blockbuster hearing concerning “Oversight of the SEC’s Failure to Identify the Bernard L. Madoff Ponzi Scheme and How to Improve SEC Performance.” The witnesses currently on the panel are:
- H. David Kotz, Esq., Inspector General of the U.S. Securities and Exchange Commission;
- Mr. Harry Markopolos, Chartered Financial Analyst and Certified Fraud Examiner;
- Mr. Barry Minkow, Co-Founder, Fraud Discovery Institute; and
- Robert Khuzami, Esq., Director of the Division of Enforcement, U.S. Securities and Exchange Commission.
As a Madoff victim, I am hoping for full disclosure at this hearing. I am hoping to find out who is responsible for the blatant failure to detect Madoff’s fraud and also to find out how it went undetected. This information is important to ensure that no investor will ever experience the devastation that we (all victims) have endured.
However, there is more that needs to be accomplished by this hearing. I am witnessing, first hand the effects of a facade of protection offered by the government. The “promise” of oversight by the SEC when in fact there was none. The “promise” of SIPC to cover my investment (up to $500,000) and pay me promptly has turned out to be a lie. This in spite of SIPC’s own words, “SIPC steps in as quickly as possible and, within certain limits, works to return customers’ cash, stock and other securities. ”
I recently found out that a complaint has been issued against FINRA, another regulatory agency who missed the Madoff fraud (yes, they DID have responsibility for oversight).
The plaintiff, Amerivet Securities states that they have reason to believe (from someone within FINRA) that FINRA’S internal portfolio was invested with Bernard Madoff.
We have 1 government agency and 2 government mandated agencies intimately involved with Madoff and/or his family members who have the responsibility to American investors to uphold fair and legitimate markets. Obviously, this did not happen. Madoff victims are the immediate outfall, but I am hoping that all investors will be forewarned by this.
In addition to ‘fixing’ the problems at the SEC, I am hoping that the Senate Banking committee will see beyond the 477 pages of Mr. Kotz’s report and look at the effects it had on the victims. The victims are asking that the SEC take responsibility for its actions and pick up the pieces of its failure by directing SIPC to promptly pay the victims, based on the value of their last account statement.