Report May Shed Light on SEC's Madoff Blunders

(AP Photo/Haraz N. Ghanbari)

The SEC inspector general is set to submit a report Monday detailing how the agency failed to uncover Bernard Madoff's multi-billion dollar fraud, according to a Fox Business report.

SEC inspector general H. David Kotz, seen left, started the probe in December after Madoff's massive Ponzi scheme came to light. Madoff is currently serving a 150-year prison sentence in a North Carolina medium-security facility.

For years, the SEC heard allegations of fraud but didn't take them seriously. Christopher Cox, who ran the agency at the time of Madoff's revelation, commissioned the investigation to figure out why.

Kotz didn't reveal the contents of the report, but told Fox Business that he would submit it to current SEC chairman Mary Schapiro Monday. The agency will determine when to make it public.

Back in January, Kotz told a congressional panel that his probe would be "independent and as hard-hitting as necessary" and vowed not to "hesitate to report the facts and conclusions as we find them."

[AwestruckJeff]

It seems to me that Ms. Genevievette Walker-Lightfoot had a better handle on the issues than her supervisors and managers had.

The upper management must have hated the fact she knew mo0re than they did and instead of pursuing her questions and trying to learn they preferred to mask their ignorance by moving her around.

Ms. Walker-Lightfoot should be appointed as a director to the new Consumer Protection Agency. We need people like her on watch. She is educated, experienced, qualified and knows what she is doing (unlike others in the regulatory industry), but most importantly she is dedicated to Public Service!!!!

[Travis70]

I wonder if the report will recognize Genevievette Walker-Lightfoot. The person inside the SEC who did discover the Madoff fraud but was taken off of the case when she got to close. Or will the SEC gloss over it?

[kenhamlett]

While they may point to a scapegoat for this lack of action, the reality is that there has been an active effort to ignore or cover up criminal activity for years. This is not just the SEC either. It takes severe pressure from outside these agencies to get any action, and even then it is never certain that an investigation will lead to charges or convictions.
Only a purge of the Federal government will get rid of the corruption.