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.
Of course the SEC failed to pursue allegations of fraud. When your governing philosophy is that government does not work (which has been the credo of conservatives for decades) and you place anti-regulation advocates in positions where regulation is needed, a self-fulfilling prophecy of failure is bound to occur.
Even more disturbing is this typical piece of Washington cronyism:
One of the commission’s investigative teams that had examined the Madoff firm was headed by a lawyer named Eric Swanson, who served for 10 years as a lawyer at the commission and left in 2006 while he was an assistant director of the office of compliance inspections and examinations in Washington.
In 2007, Mr. Swanson married Shana Madoff, a niece of Bernard L. Madoff and daughter of his brother, Peter Madoff, the firm’s chief compliance officer. Ms. Madoff is the firm’s compliance attorney.
No wonder Madoff was able to get away with it! Why exactly would someone investigate his own family? Why was Mr. Swanson put in the position to do so in the first place? The SEC had absolutely no interest in doing its job and now all Americans from the wealthiest to the most poor are suffering the consequences. While attempting to cater to the wealthy, the Bush Administration has instead led our economy into its worst conditions since the 1930s, thereby reducing the wealth of his most loyal constituents. Instead of screwing over only Democratic Party voters, Bush has given the shaft to all Americans. Talk about a uniter!
The Securities and Exchange Act of 1934 was explicitly created to prevent these types of abuses from occuring. Unfortunately, it took another financial calamity to demonstrate how unserious its senior management was about carrying out its essential duties. Chairman Cox and his entire staff should be investigated.