Regulators had five chances to rumble Madoff, says report
US FINANCIAL regulators missed five chances to uncover Bernard Madoff’s $65bn (£40bn) Ponzi fraud, a scathing report said yesterday.
The report by the inspector general of the US Securities and Exchange Commission (SEC) Charles Grassley said the SEC launched five investigations into Madoff’s activities dating back to 1992.
But the giant fraud was only uncovered when Madoff himself decided to turn himself in to authorities.
“A thorough and competent investigation or examination was never performed,” said Grassley.
SEC examiners noticed contradictions in what Madoff was saying about his investment business but failed to dig deeper for the truth, the preliminary report found.
At one point, the SEC’s enforcement staff “caught Madoff in lies and misrepresentations, but failed to follow up” and accepted his explanations, it said.
Grassley, a Republican senator, said this was “further evidence of a culture of deference towards the Wall Street elite at the SEC”.
A full 450-page report on the regulatory failures is expected to be released on Friday.