Posts Tagged ‘H.David Kotz’
What did these clowns do to earn their paycheck?
Daylife/Getty Images used by permission
Unseasoned investigators from the Securities and Exchange Commission were alternately intimidated and enthralled by a name-dropping, yarn-spinning Bernard L. Madoff as he dodged questions about his financial house of cards, according to a scathing new report on the agency’s repeated failure to uncover the huge investment fraud.
“Unseasoned investigators” is Wall Street-speak for Lazy Incompetent Hacks.
“Madoff carefully controlled to whom they spoke at the firm,” the S.E.C.’s independent watchdog said in the report released on Wednesday.
When one of Mr. Madoff’s employees was talking to investigators in 2005, an aide to Mr. Madoff broke up the conversation, explaining that it was time for lunch — at 3 in the afternoon.
I guess Martha Stewart should have fixed lunch for them. Then, they wouldn’t have been so dedicated about going after her “enormous” profit.
The incident was one of several recounted by the agency’s inspector general, H. David Kotz, in a report that concludes numerous “red flags” were missed by the agency from at least 1992, not just because of inexperience and incompetence, but because investigators failed to follow incriminating evidence in plain sight and were cowed by Mr. Madoff, who had an inflated reputation on Wall Street.
The report details six substantive complaints against Mr. Madoff received by the agency, which were followed by three investigations and two examinations. Yet the agency never verified Mr. Madoff’s trading through a third party. Time and again, it was noted that the volume of his purported options trades were implausible. When the enforcement staff received a report showing that Mr. Madoff indeed had no options positions on a certain date, the agency simply did not take any further steps…
It was not Mr. Madoff’s cleverness that enabled him to fleece thousands of investors out of billions of dollars for years, Mr. Kotz said. It was the fact that, “despite numerous credible and detailed complaints,” the S.E.C. never took “the necessary, but basic, steps to determine if Madoff was operating a Ponzi scheme.”
RTFA. It’s good.
Here’s the link to the 22-page executive report. The detailed 450-page report will probably just piss me off for another year.