Subscribe: RSS Feed | Twitter | Facebook | Email
Home | Contact Us

Posts Tagged ‘did SEC have any experienced investigators looking at Madoff’

Did the SEC Have Any Experienced People Looking at Madoff? You Betcha!!

Posted by Larry Doyle on September 7th, 2009 11:24 AM |

While the SEC Inspector General David Kotz would have the American public believe the SEC fell down in its oversight of Bernie Madoff largely due to inexperienced investigators, this claim is very shallow.

Former SEC lawyer Genevievette Walker-Lightfoot was investigating Madoff in 2004 but was reassigned when she started to ask the hard questions. The Wall Street Journal highlights Ms. Walker-Lightfoot’s time working for the SEC in writing, Ex-SEC Lawyer: Madoff Report Misses Point:

A former Securities and Exchange Commission lawyer who investigated Bernard Madoff in 2004 says the new report on how the agency failed to uncover his massive fraud places too much blame on staff examiners and overly generalizes about their “inexperience.”

Genevievette Walker-Lightfoot told Dow Jones Newswires on Thursday the SEC inspector general should have focused more of his attention on how supervisors, rather than the staff examiners and investigators, handled the agency’s many stillborn probes of Mr. Madoff.

SEC inspector general, H. David Kotz, reached by telephone, said he considered it premature for Ms. Walker-Lightfoot to criticize the summary before the full response was released. He described himself as “befuddled” by her remarks. Mr. Kotz noted the decision to release the summary was made by SEC Chairman Mary Schapiro, not by his office.

An executive summary of the report, released on Wednesday, repeatedly emphasized what it described as the inexperience, confusion and limited expertise of staff assigned to at least six investigations involving Madoff since 1992.

Ms. Walker-Lightfoot — who recommended more action in a 2004 investigation that was shelved — said those descriptions were overly simple, and the summary generalized too much.

“My experience is a key example,” she said. “Here was someone who raised red flags and said “We need to look into these things.” But I wasn’t senior management, so it wasn’t my call.”

The full report is expected on Friday, and she said she would reserve final judgment on it until then.

Ms. Walker-Lightfoot, who is now a lawyer for the Federal Reserve Board, was part of a four-person team in the SEC’s Office of Compliance Inspections and Examinations, or OCIE, who investigated Mr. Madoff’s firm in 2004. She informed a supervisor of inconsistencies she learned of during her review and suggested following up.

Instead, her team was ultimately diverted to another case.

Who made this decision? Why? (more…)






Recent Posts


ECONOMIC ALL-STARS


Archives