SEC told to fully probe complaints to bust fraud

Reuters on Yahoo ^ | 9/11/09 | Reuters

[NormsRevenge]

WASHINGTON (Reuters) – After bungling five probes that should have uncovered Bernard Madoff's $65 billion fraud, regulators must learn to aggressively investigate tips and complaints to catch wrongdoers, the U.S. Securities and Exchange Commission's internal watchdog said on Thursday.

A scathing report issued last week by SEC Inspector General David Kotz found that the agency missed numerous red flags, did not properly follow up on leads and dismissed tips and complaints that might have uncovered Madoff's investment sham.

At a congressional hearing to examine the SEC's shortcomings, Kotz outlined dozens of recommendations to improve SEC procedures for handling tips and examining individuals and companies.

He urged the SEC to make sure that complaints were properly vetted, saying tips and complaints had to be reviewed by staff who had related experience.

Kotz's report detailed, for example, how three staffers discounted a detailed 2005 complaint about Madoff by Harry Markopolos because he was a competitor rather than a Madoff employee or investor.

The three staffers -- two of which were relatively senior employees -- had never investigated a Ponzi scheme, where initial investors are paid with money from newer investors.

[muawiyah]

It makes sense ~ the SEC hires lawyers and CPAs heavy into an understanding of stock trading and investment banking.

Such people are not, by nature or training, investigators. They don't have a clue what to do.

SEC should have all of its hiring standards and job descriptions reviewed by OPM, the FBI and other professional investigative bodies to make sure they can "attract" the right sort of folks to work there.

It's pretty clear that their present personnel standards are not only inadequate, they are dangerous to the nation.

[SueRae]

Then let themj go to www/deepcapture.com
and read the story of Dendreon, a company with a promising cancer treatment that was derailed by the likes of none other than Michael Milken and his hedge fund cronies. Lives were lost, not just money. The rabbit hole indeed goes deep..

[SueRae]

Then let them go to www.deepcapture.com

and read the story of Dendreon, a company with a promising cancer treatment that was derailed by the likes of none other than Michael Milken and his hedge fund cronies. Lives were lost, not just money. The rabbit hole indeed goes deep..

[Diggity]

This will eventually lead to a criminal probe because people in the SEC were paid off.

Lots of people knew about this but kept their mouths shut.

Anyone ever wonder why Grasso was paid $164 million for one years work?? I think we know now.

John