Super Moderator
Location: essex ma
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i caught a bit of markopolos' testimony on c-span. he presents an interesting case, both in terms of information and in himself as a delivery system---the former is quite damning and the indictment of the entire sec that followed from it seems accurate and justified--the bottom line is that the sec is entirely in bed with the industries they are supposed to regulate and that for there to be coherent regulation there has to be a purge of the upper management of the sec and a fundamental shift in orientation. the picture that emerges is of a regulatory body made over in the republican image of a regulatory body--staffed with incompetents, corrupt fundamentally, unwilling and unable to carry out it's function.
at the same time, markopolos comes across as being extremely tightly wrapped, teetering on the edge of paranoia by disposition, the sort of person whose delivery is its message's worst enemy.
this following provides a watered-down summary of the proceedings:
Quote:
At Madoff Hearing, Lawmakers Lay Into S.E.C.
By DIANA B. HENRIQUES
WASHINGTON — Securities regulators could not cool the white-hot Congressional fury on Wednesday over their failure to act on tips that might have exposed the Madoff scandal almost a decade ago.
At a contentious hearing by a House Financial Services subcommittee, Harry Markopolos, a private fraud investigator from Boston, detailed his persistent but futile efforts to spur the Securities and Exchange Commission to investigate Bernard L. Madoff, going back to 1999.
Mr. Madoff was arrested in December and charged with running a giant Ponzi scheme — the very accusation Mr. Markopolos said he made repeatedly to S.E.C. employees in Boston and New York to no avail.
Lawmakers spent the rest of the hearing in a heated dialogue with senior S.E.C. staff members, getting little satisfaction and suggesting the agency was the problem.
In the torrent of criticism that Mr. Markopolos and lawmakers heaped on the S.E.C. and its senior staff members, some complaints were serious — that the agency lacked the expertise to tackle major frauds by big players and had no systematic way of dealing with whistle-blowers. Others were sarcastic, with Mr. Markopolos saying regulators seated in Fenway Park in Boston would have trouble finding first base.
The agency’s officials repeatedly tried to explain that they could not discuss the handling of the Madoff case without jeopardizing that pending investigation — and were repeatedly cut off by lawmakers who demanded specific information about the handling of the case.
Representative Paul E. Kanjorski, Democrat of Pennsylvania and the hearing chairman, criticized the official position as an expression of arrogance that he said was at the root of the agency’s regulatory failures.
Congress is in the midst of creating regulatory changes that could change the agency’s fate, Mr. Kanjorski warned the panel of official witnesses. Lawmakers want immediate candor about the handling of the Madoff matter, not generalities, he said.
But the hearing became a collision of frustrations that, at one point, prompted Mr. Kanjorski to accuse the staff members of refusing to cooperate with a branch of government that could wipe their entire agency off the regulatory map, if necessary.
Representative Gary L. Ackerman, Democrat of New York, was more blunt in his condemnation of the S.E.C. officials sitting before him: “We thought the enemy was Mr. Madoff. I think it is you.”
Mary L. Schapiro, the new chairwoman of the S.E.C., later released a letter to the subcommittee’s senior members, conceding that the hearing “cannot have been satisfactory for you.” She asked to meet with them promptly to work out “a course forward” that would both provide accountability and maintain the integrity of continuing investigations.
“There needs to be a full accounting, both of Mr. Madoff’s activities and why we did not detect the fraud, which we truly regret,” she said.
The hearing had opened with Mr. Markopolos telling the panel he had discovered another possible fraud, a $1 billion Ponzi scheme, that he would report to regulators on Thursday. Neither he nor his lawyers would provide any additional details.
Mr. Markopolos also said he would tell regulators about a dozen private foreign funds — which he said were “hiding in the weeds” in Europe — that raised money for Mr. Madoff and had sustained major losses.
These funds have not yet been publicly identified, he said. And their silent victims most likely include investors of “dirty money,” including Russian mobsters and Latin American drug cartels, he said — although he acknowledged that he did not have specific information about such investments.
A lawyer for Mr. Markopolos said later that his client would make his reports to the S.E.C. inspector general, with whom he will meet on Thursday, and “through other channels.”
Linda Chatman Thomsen, the S.E.C. enforcement director, told lawmakers that the agency staff had demonstrated its willingness and ability to pursue major fraud cases, including 70 Ponzi schemes. Still, it missed opportunities to zero in on Mr. Madoff, who was arrested Dec. 11 at his New York apartment and charged with operating a Ponzi scheme whose losses he put as high as $50 billion, according to the civil and criminal complaints against him.
Ms. Thomsen said the agency, under Ms. Schapiro, would work hard to improve its receptiveness and responsiveness to whistle-blowers like Mr. Markopolos. But her responses did not seem to satisfy any of the half-dozen lawmakers who stayed at the hearing after Mr. Markopolos left.
They had been far more riveted by Mr. Markopolos’s testimony, which at times seemed to enter verbal territory more often explored at organized crime hearings. He referred to his fear that he would be killed if Mr. Madoff learned of his investigation. At one point, noting his experience in military intelligence, he described an offer he made to “go undercover” for the S.E.C. — a proposal that was rebuffed.
And he recalled wearing gloves as he assembled a package of information he planned to slip to Eliot Spitzer, when he was New York’s attorney general, so he would leave no fingerprints.
While one lawmaker asked whether this all wasn’t “a little paranoid,” others agreed that Mr. Markopolos was wise to be cautious, given the scale of the fraud he was trying to bring to light.
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http://www.nytimes.com/2009/02/05/bu...f.html?_r=1&em
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a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear
it make you sick.
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