Madoff, Markopolos, and the SEC
by Jeffrey Miron on March 31st, 2010
3 Comments
I have just finished reading No One Would Listen, the account by whistle-blower Harry Markopolous of his battle with the SEC to expose Bernie Madoff.
The charges that Markopolos levels at the SEC are textbook criticisms of government regulatory bodies: incompetence, lack of interest, capture by those regulated. The characterization of the SEC is savage.
Yet Markopolos does not conclude that regulation is a waste of time; he instead calls for “better” regulation.
Why does he think such a system exists?
Categories: My Blog
Under the Weather
It’s hard to regulate when you have all that porn streaming across your computer.
http://www.nypost.com/p/news/business/sec_porn_again_BZryHIvU1RNFrJabuUeINO
Anyway, yeah, isn’t that the irony of big government folks? They always call for regulation – then when the regulation fails – they call for more regulation. We’ll probably see the same with health care. If the health care bill doesn’t work, I’m sure we’ll just need to throw more money and more clauses into it.
Eric Morey
Regulation is not expected to prevent 100% of fraud, but increase the likelihood that an investor would be able to spot it with proper due diligence. I think that the Madoff scandal was of 2 parts:
1) No investor knew about the complaints to the SEC. Therefor had less reason to investigate.
2) No investor cared to do proper due diligence due to the ‘reputation’ and history of the Madoff fund(s).
AJs
Clearly the problem is that they thier budget was not large enough to effectively regulate. If we just gave the regulatory body more money, they would have stopped this. They need a bigger budget to hire more people and require more companies to fill out more forms. What, you are against protecting the children?