Harry Markopolos, the fraud investigator who blew the whistle as early as a decade ago on Bernard Madoff, if only the SEC had had ears to listen, slammed the agency in written testimony made public last night.
Markopolos, who will answer questions in person before a House committee this morning, decried the SEC’s inadequate efforts to detect financial fraud in response to detailed written complaints he submitted on Madoff’s operation.
“There was an abject failure by the regulatory agencies we entrust as our watchdog,” he wrote. According to (sub req.) the Wall Street Journal, Markopolos added that the agency’s enforcement staff “made little effort to understand the derivative instruments Mr. Madoff said he was using.”
Markopolos continued:
[T]he SEC securities’ lawyers if only through their ineptitude and financial illiteracy colluded to maintain large frauds such as the one to which Madoff later confessed.
He even confessed that he and his team had submitted some documents anonymously — because they feared for their safety in going after Madoff, given their target’s powerful status on Wall Street.
Last month, we documented the SEC’s shift away from enforcement here at TPMmuckraker.
We’ll bring you more form Markopolos’ live testimony after it starts this morning.
