Funds blame US regulators for Madoff debacle
By James Mackintosh and Kiran Stacey in London
December 18 2008 23:30
http://www.ft.com/cms/s/0/5df0156a-cd35-11dd-9905-000077b07658.html?nclick_check=1
Hedge funds and investors who lost money in the alleged $50bn Madoff scam have begun defending their decision to invest with Bernard Madoff, in some cases trying to shift the blame to US regulators.
Union Bancaire Privée, the Swiss bank that is one of the world’s biggest hedge fund investors, told clients in a letter this week that it had spotted potential dangers but had been reassured by Mr Madoff’s reputation and clean regulatory record.
Other investors – while expressing shock at what could be the biggest ever financial fraud – said they were angry at the failure of the Securities and Exchange Commission, the US markets watchdog, to spot the fraud.
“The American authorities must bear a great deal of blame for this,” said Ken Thornber, leader of the UK’s Hampshire County Council, whose pension fund lost £7m by investing with a Madoff fund.
“They missed as obvious a trick as pyramid selling and to do that with people’s savings is unforgivable. We have got a regulatory crisis of global proportions. Where on earth were the American authorities here?”
Another Failure of Republican Deregulation
Discussion in 'Political Debate & Discussion' started by JustChristian, Dec 18, 2008.
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Revmitchell Well-Known MemberSite Supporter
I am not registering to read this story. What deregulation occurred by republicans to allow this?
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Bro. Curtis <img src =/curtis.gif>Site Supporter
That's the question I would ask, Mitch.......
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Bro. Curtis <img src =/curtis.gif>Site Supporter
Can you point out the regulation they threw out ?
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Bro. Curtis <img src =/curtis.gif>Site Supporter
OK. Are you going to wait for J/C do post it ?
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Crabtownboy Well-Known MemberSite Supporter
Should be an interesting topic to research and here is a bit of what I have found since writing the sentences above:
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Actually the campaign year was 2000 and Bush came to office in January 2001 after election disputes and amid a somewhat uncooperative transition. (I'm not blaming Pres Clinton for this.... but reports were fiercely circulated regarding the attitudes and behavior of staff.)
The Madoff scam:
This was a scheme long in the making. Somewhere I heard reported that there were questions in the early 90's. Whatever the truth is regarding when this scam finally broke and who was suspicious, it seems so far that until his own sons reported their suspicions, the only other substantial report came from a person, Markopolos, who was in a competing firm. Many of these governmental regulatory agencies only do a cursory and superficial examination on well established institutions as their manpower is involved in repeated reviews and mentoring new businesses into conforming with their policies: There is an assumption that any problems which may arise are being found and corrected 'in house' through the normal structures of good accounting and auditing procedures and review and updates of company policies to keep them in compliance with current law are taking place. The most effective and legitimate complaint which initiates investigation is a customer who has been defrauded: Until then, its a sad situation, but established business find themselves kind of protected by the enormous and time consuming job which the people in these government agencies have to perform. This is not to excuse the SEC etc from their inadequate oversight to insure that schedule reviews took place and that certified audits were presented at these reviews..... which was not done in this case.
It is a bit extreme to put a political swing or 'blame the President' to this...... but some can't see deeper than their own bias and while pretense at peace and unity, prefer to interject politics as a way of adding incitement into problems and solutions which are not partisan at all. -
Harry Truman said that the "Buck stops here" and owned any problems that arose during his watch. There's been a remarkable lack of the President owning problems for the last 8 years. This quote from your source shows that the SEC under Bush found violations of security laws in 2005 and in 2007 (Why the 2 year delay?) SEC enforcement staff completed an investigation and did not refer the matter to the SEC commissioners for legal action. Who's responsible if not the administration?
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ibid
The SEC said it conducted two inquiries of Madoff in the last several years and did not find major problems.[48] An SEC statement detailed that inspectors examined Madoff's brokerage operation in 2005, finding three violations of rules requiring brokers to obtain the best possible price for customer orders, while in 2007, SEC enforcement staff completed an investigation and did not refer the matter to the SEC commissioners for legal action.[49] -
So what's the Republican deregulation?
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I guess it's also Bush's fault I just paid $1.29 per gallon for unleaded.:rolleyes: -
Madoff has been running his Ponzi scheme for decades. -
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Bro. Curtis <img src =/curtis.gif>Site Supporter
Well, since yer not going to back up yer own thread, we figured we'd talk amongst ourselves. Hard to demand to stay on topic when you won't participate.
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Maybe people should ask what kind of idiot would put their entire savings/nest egg/portfolio in a fund that is pulling numbers that are divorced from reality?
A Ponzi Scheme is not a new thing. And except for Social Security (the only legal Ponzi scheme), people should follow the adage, "if it seems too good to be true, it probably is." Ponzi schemes will always exist, no matter the regulations--because greed exists, no matter the regulations.
You can't regulate stupidity or greed out of existence.
Of course, I forget: George Bush is personally responsible for the existence, actions, and reprocussions of every single criminal in the US and overseas.
J/C, will you give the next president the same "respect?" :rolleyes: -
Revmitchell Well-Known MemberSite Supporter
So what deregulation lead to this (specifically) and who did it?
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The fact you took the time to respond to an off topic post means you have seen the questions.
You are being intellectually dishonest in not participating in your own thread about your chosen subject.
You could just admit you made an unsubstabtiated allegation and let it go at that.
How 'bout it? :wavey: -
http://www.nytimes.com/2008/12/17/business/17madoff.html?_r=1&hp
S.E.C. Says It Missed Signals on Madoff Fraud Case
By ALEX BERENSON and DIANA B. HENRIQUES
Published: December 16, 2008
The Securities and Exchange Commission said Tuesday night that it had missed repeated opportunities to discover what may be the largest financial fraud in history, a Ponzi scheme whose losses could run as high as $50 billion.
The commission said it received credible allegations about the scheme at least nine years ago and will immediately open an internal investigation to examine why it had failed to pursue them aggressively.
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Guess who was president then... -
Crabtownboy Well-Known MemberSite Supporter
I really feel sorry for all the people who have lost money in this scam. Really a shame.
Seems I read or heard somehere that the current SEC felt it was the little guys they had to watch and the big guys, like Madoff, must be honest and not need careful watching. Can't find it now ... maybe I heard it on CNN International.
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