SEC Chief Says His Staff Ignored Madoff Warnings

Cox calls actions 'deeply troubling'
By John Johnson,  Newser Staff
Posted Dec 16, 2008 7:51 PM CST
In this 1993 file photo, Richard Grasso of the New Stock Exchange, left, ex-SEC chief David S. Ruder, center, and Bernard Madoff appear before a House panel.   (AP Photo)
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(Newser) – SEC chief Christopher Cox blasted his own agency's failure to detect Bernard Madoff's massive investment-fraud scheme, the Wall Street Journal reports. Cox called it "deeply troubling" that SEC investigators had ignored "credible and specific allegations" dating back to at least 1999. He called on the SEC's inspector general to look into the handling of the allegations.

Cox also said Madoff "kept several sets of books and false documents, and provided false information involving his advisory activities to investors and to regulators." Still, Cox said his own investigators were guilty of "multiple failures." The inspector general will investigate the relationship between Madoff's niece and a senior SEC investigator. The two married in 2007, a year after the inspector left the SEC following a 10-year stint.