There’s just one more day to send in your nominations for the 2008 Golden Duke Awards. Today, we meet the judges who will choose the winners.
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Throwing a shoe at someone doesn’t signal respect in the Arab world the way it does in ours.
Senate Republicans ask for documents on Eric Holder’s role in the Elian Gonzales case.
From the statement released late today by SEC Chairman Christopher Cox …
A bit of information on just how Madoff operated …
Although the information I can share regarding an ongoing investigation is limited, progress to date indicates that Mr. Madoff kept several sets of books and false documents, and provided false information involving his advisory activities to investors and to regulators.
And what the SEC’s internal review has come up with so far …
Since Commissioners were first informed of the Madoff investigation last week, the Commission has met multiple times on an emergency basis to seek answers to the question of how Mr. Madoff’s vast scheme remained undetected by regulators and law enforcement for so long. Our initial findings have been deeply troubling. The Commission has learned that 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. I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them. Moreover, a consequence of the failure to seek a formal order of investigation from the Commission is that subpoena power was not used to obtain information, but rather the staff relied upon information voluntarily produced by Mr. Madoff and his firm.
Cox has initiated an SEC Inspector General’s investigation into why red flags about Madoff’s operation went unheeded with the “mandatory recusal from the ongoing investigation of matters related to SEC v. Madoff of any SEC staff who have had more than insubstantial personal contacts with Mr. Madoff or his family.”
The Journal (sub.req.) says that the SEC IG investigation mentioned below will likely scrutinize the relationship between Madoff neice, Shana Madoff, who was the firm’s chief securities compliance counsel and Eric Swanson, a senior inspections and compliance official at the SEC until he left in 2006.
Madoff and Swanson married last year.
Interior and Ag secretaries expected to be unveiled at this morning’s Obama presser: Salazar and Vilsack, respectively. That and the day’s other political news in the TPM Election Central Morning Roundup.
Over the last few days, as we’ve been devoting a lot of coverage to the Bernard Madoff story, a number of readers have written in to say, “You’re saying all this stuff about how he kept his scheme hidden. But you haven’t been clear enough on what he actually did.”
So let me try to clear this up, or explain why I don’t think we really can clear it up yet.
The truth is that as yet we know very, very little about just what Madoff was doing or where the money went. One of the few official reports was in yesterday’s statement from SEC Chairman Christopher Cox which noted that Madoff kept several sets of false books, etc. But that’s hardly surprising.
Most of the assumptions stem from Madoff’s own words describing it as a “Ponzi scheme” and his confession that he’d swindled some $50 billion. But calling something a Ponzi scheme covers a lot of territory. And it doesn’t tell us that much in terms of where all the money went, whether it was a scam from the git-go or evolved into one, or much of any detail, etc.
I would also suggest one further note of caution, though this is much more speculative.
On its face Madoff is confessing to everything. He’s saying he’s a fraud and he swindled people out of $50 billion. So it’s hard to see what he’s holding back. That said, he appears to be maintaining the pretense that he managed the entire swindle on his own — that none of the family members who were intimately involved in running the fraudulent part of his operation had any idea what he was doing. And that seems preposterous on its face.
It’s understandable that he wouldn’t want to pull his whole family down, and that his family wouldn’t want to be pulled either. But I think it’s worth keeping open the possibility that behind Madoff’s maximal confession of guilt — and in addition to wanting to protect his family — there’s more people he’s trying to protect or secrets he’s trying to hide.