I’ve been too busy too keep up with the news but the spectacular implosion of the Madoff hedge fund caught my attention if only because it serves up another great example of regulators being asleep at the switch at the US Securities and Exchange Commission instead of protecting the investing public from fraudsters such as Bernard Madoff. From what I’ve read and heard Madoff’s so called investment bank was nothing more than ye ole Ponzi Scheme. Even better the toothless watchdogs at the SEC looked at Madoff multiple times and found nothing wrong.
I’ve written about the problems with regulatory capture many times here on slabbed, from our own Mississippi Insurance Commissioner Mike Chaney to big problems at the SEC involving John Mack, CEO of Morgan Stanley. The end result is never good for the public though Mr Mack’s $40 million dollar bonus must have been nice for him.
As for the group of very distinguished bagholders that resulted from Mr Madoff’s get rich quick Ponzi Scheme, they may just get a bailout according to this AP story carried by the Sun Herald.
A federal judge on Monday threw a lifesaver to investors who may have been duped in one of Wall Street’s biggest alleged frauds, saying they need the protection of a special government reserve fund set up to help investors at failed brokerage firms.
U.S. District Judge Louis L. Stanton ordered that clients of Bernard Madoff’s private investment business seek relief under a federal statute created to rescue cheated investors. Stanton also ordered that business be liquidated under the jurisdiction of a bankruptcy court and named attorney Irvin H. Picard as trustee to oversee that process. Continue reading “The End Result of Regulatory Capture: Madoff and Another Bailout”