Saturday, December 12, 2009

SEC SUES FINANCIER FOR IGNORING SIGNS OF MADOFF FRAUD

Click here to read story.

The Times reports that the SEC filed a civil suit in June against the operator of a “feeder fund” to Bernie Madoff and the Justice Department is investigating the same setup for possible criminal violations. The basis asserted by the SEC and, presumably, the Justice Department, is that he “ . . . steered clients’ money to Mr. Madoff — and collected hundreds of millions of dollars in management fees — ‘despite having clear indications that Madoff was conducting a fraud.’ ”

It is tempting to put the last quotation in screaming purple italics. Is the SEC not the same organization that for over a decade ignored complaints about Mr. Madoff’s operations from knowledgable sources “. . . despite having clear indications that Madoff was conducting a fraud?” This gives us a new definition of chutzpah: in place of the old one, a child who murders his parents and pleads for mercy because he’s an orphan, we have a government watchdog suing an individual for not acting on evidence that the watchdog itself ignored the whole time

Surely the defendant will try to point this out to the jury, but the SEC’s lawyer, or the prosecutor, will object on the ground that following the example of a government agency is not a defense. Everyone involved in the SEC’s show trial will take it with a straight face. But I won’t. I’m laughing already.

This Bizzaro standard of responsibility advocated by the SEC is as ridiculous as Jeffrey Dahmer complaining that his victim's corpse assaulted him with its final twitch. If there is justice in the world we’ll see the feeder fund operator let off the hook and the entire SEC marched off in chains in an internationally televised perp walk. Of course, that won’t happen, but I’m still laughing.

2 comments:

Madoff Coalition for Investor Protections said...

Mr. Smith,
It's so refreshing to hear that you see the absurdity of this situation.
Sometimes when I read articles (especially written by Ms. Henriques)I am appalled at the apparent slant away from reality. I hope the book she is currently writing reflects a more realistic view of the Madoff situation.
As the Coordinator for the Madoff Coalition for Investor Protection, I thank you for bringing the SEC failure and their continual denial of responsibility to the forefront.
Please keep the public posted of this. The Coalition fears that all American investors are as vulnerable to the same negligence of the SEC as we were.
For more information on our Coalition, please contact:
bmv.coordinator@gmail.com or visit
bernardmadoffvictims.org

Thank you,
Ronnie Sue Ambrosino
Coordinator
Madoff Coalition for Investor Protection

by Marty Smith said...

I'm sure it's too late. I get so few comments on my mixed bag of infrequent blog posts I don't look for them. I appreciate your comments. What seems obvious to me often appears dim and distant to others. I wish you well in your efforts. In the last fifteen or so years the government has let down a lot of victims of rather obvious financial fraud, and continues to do so. Damn if I know what to do unless we can Elliot Spitzer to take the job of Lord High Executioner.