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US regulator grilled over Madoff fraud
The United States Securities and Exchange Commission has asked internal supervisory body to probe the agency's dealing with the Bernard Madoff fraud scheme.
- Agencies
- Published: 08:44 December 17, 2008
Boston/New York: The United States Securities and Exchange Commission has asked internal supervisory body to probe the agency's dealing with the Bernard Madoff fraud scheme.
The Commission has come under fire for missing several red flags about Madoff, who has been accused of running a $50 billion Ponzi scheme.
SEC Chairman Christopher Cox said he was "gravely concerned" by the agency's "apparent multiple failures over at least a decade" to thoroughly investigate allegations or seek formal authority to pursue them.
"Credible and specific allegations regarding Mr Madoff's financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the commission for action," Cox said.
The disgraced Wall Street executive, who was arrested in New York last week was scrambling on Tuesday to post his $10 million bond to keep him out of jail.
A court hearing was set for Wednesday on bail matters after a Tuesday hearing was postponed.
In Massachusetts, the state's chief securities regulator subpoenaed Bernard L. Madoff Investment Securities and Cohmad Securities Corp, a firm that marketed Madoff investment products.
The two firms have until December 29 to surrender the names and addresses of all local residents who let Madoff invest their money. They must also deliver notes, emails, meeting agendas related to investments made since 2000, William Galvin, the state's Secretary of the Commonwealth, said on Tuesday.
As more banks, hedge funds and wealthy investors around the world realize they fell victim to a man long respected on Wall Street for the steady returns that his funds produced year after year, their outrage has grown.
The prosecutor's in the case, the US Attorney's Office in New York has set up a website for investors who may have been victimised. It also posted an FBI hotline number, 212-384-2359, for investors to call.
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