Home » The SEC Madoff investigations: shockingly inept

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The SEC Madoff investigations: shockingly inept — 12 Comments

  1. Well, it might not be as bad as all that, Neo. They could just have been bought off with either monetary compensation or an even simpler compensation in the form of Madoff’s sincere and righteous reputation.

    Given the Left’s elitism and respect for authority, why would they regulate Madoff?

    There’s no need for that when we have Obama to regulate healthcare, auto industries, and everything else.

  2. So, essentially, the best that comes out of government is either,

    A. They get an IG to clean up the bodies after the fact, in which people are shown to be incompetent because that’s what the system put into place, incompetence and the bottom 25% in terms of human capacity

    Or

    B. Obama fires the IG if he is getting too close to a friend.

    Government’s got good credentials on this one, Neo. Nobody can be that incompetent unless they actively work to get a system to promote incompetence.

  3. So they sound about as competent as the CIA….

    I’m assuming they were career members and not political appointees.

  4. Thomass raises the related, interesting question of whether “career” government employees are more competent than political appointees.

    In my, not small, experience with technical government workers, the less the competence, the greater the care to ensure the career. Competence is no more, possibly somewhat less frequent in government service than private enterprise. Worst is that it is almost impossible to terminate for incompetence in government.

    My question is if Ms. Cheung is another case of an Affirmative Action hire, or, more probably, promotion? . . . . Probably not, probably just the arrogance of lawyers hiring lawyers.

  5. On overlooking the obvious – in the Garridos kidnap/rape case, a simple look at a bird’s eye view of his property (easily available on the internet) by the visiting parole/police officers would have blown this thing open a long time ago.

  6. And the Demos want to increase government control of everything! This posting is not exactly an indication that things will improve when we do increase government control.

    A company is only as good as its operations manuals, and when the operations manuals for the USG are the thousand of pages of gobbletygook that comprise US Code, Houston is not the only place that has a problem.

    More clowns at the wheel…

  7. Neo: I have friends who are lawyers too. They are pretty smart people but they are not auditors or investigators and most of them know that. Lawyers without a heavy financial background should know when to call in experienced auditors or Certified Fraud Examiners (CFE). The SEC has lots of legal investigative powers and could have easily done a proper investigation using outside contractors to do the heavy lifting in a good audit. Experienced professionals could have figured Madoff out fairly quickly which explains why Bernie himself was so shocked that he wasn’t found out earlier. One question is why did the SEC send a bunch of easily intimidated kids to do the work of grownups? Who was the adult in charge? Could someone high up in the SEC purposely have sent neophytes knowing they would’t be smart enough to find anything? Bernie had lots of friends in the SEC. Perhaps Congress should appoint a special prosecutor! At this point, I wouldn’t trust the SEC to investigate themselves.

  8. GOOD NEWS!!! There is finally a great movie out about stock market manipulation, the SEC, and short selling called: “Stock Shock.” Amazon has it or stockshockmovie.com has a trailer.

  9. Lawyer Cheung will be able to find a promotion over to the new Health Care Benefits Administration, determing who should and shouldn’t get an MRI.

  10. The claim of a need for expertise does sound very strange. This isn’t difficult stuff as far as derivatives go, which kind of begs a few questions concerning her employment and that Yale degree.

  11. The fact that the SEC intended to conduct some third party records checks after Bernie’s testimony and failed to carry out that very simple task is proof of gross negligence. Worse, that task may have been cancelled by someone higher up. These checks on external records from third parties are routine for all audits and investigations. Indeed, the worksheets for audit programs have these tasks there to be checked off and initialed by an official. At the very least, there should be mass firings of some high level people at the SEC.

  12. Yes, third-party checks are absolutely basic and necessary to any audit. If an auditor or examiner doesn’t do them, then he is essentially taking the examinee’s word for what’s in the books. You don’t have to be a CFE or forensic accountant to know how to do this. I learned it in my regular accounting curriculum (although the CFE program reinforced the requirement). Not to do these checks is negligence/malfeasance of the worst type.

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