SEC dropped the ball in Bernie Madoff case
The man who created the largest Ponzi scheme in U.S. history, Bernard Madoff, will be going to prison — probably for the remainder of his life — as a result of his pleading guilty Wednesday to 11 criminal counts related to his scam.
That will be of small comfort to the thousands of people and organizations who reportedly lost somewhere upward of $50 billion in Madoff’s investment plan, which involved no investment at all.
We now know he simply deposited people’s money in his own bank account, withdrew money when payments were requested by investors — or to supply his own high-living needs.
And we know that his victims included some of New York’s elite, Hollywood and sports celebrities and charitable organizations.
The world has also learned in the past couple months that the federal Securities and Exchange Commission had received repeated reports of Madoff’s criminality. The agency even investigated him several years ago. One Boston accountant repeatedly sent the agency information about Madoff’s scheme, but was ignored.
The SEC did recover $650 million of the assets Madoff stole, but dividing that up among people who collectively lost billions won’t prove to be very satisfying.
Here’s hoping the agency improves its watchdog role under new chairwoman Mary Schapiro.