Stung by Madoff, SEC Steps Up Pace, Triples Fraud Cases

Embarrassed committee gets aggressive with enforcement

By Gabriel Winant, Newser User

Posted May 8, 2009 8:18 AM CDT

(Newser) – Haunted by the failure to catch Bernie Madoff, the Securities and Exchange Commission is dramatically stepping up its investigation workload, reports the LA Times. Since February, the SEC has frozen the assets of 27 fraud suspects, compared to seven in the same period last year. “The clear message from the commission is we should be acting quickly where investor funds may be at risk from an ongoing fraud,” says the LA office head.

Having a new chief has made a difference, say employees. “I think the pipeline moves a lot faster at the commission than it used to,” says a former enforcement attorney. But the recession itself is also helping the SEC blow open frauds, as cash-starved investors trying to pull their funds find the money gone.

[Images (3)]

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In this March 11, 2009 file photo, SEC Chairman Mary Schapiro, testifies on Capitol Hill in Washington. (AP Photo/Manuel Balce Ceneta, file)

In this June 11, 2008 file photo, Sir R. Allen Stanford poses for photos at the Lords Cricket Ground in London. Stanford is accused of running a Ponzi scheme. (AP Photo/Lefteris Pitarakis, File)

Bernard Madoff arrives at federal court in New York Thursday, March 12, 2009. (AP Photo/Mary Altaffer)

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The pace has accelerated dramatically. I think the turnover and the new director of enforcement at the SEC is having an immediate impact.
- Patrick Hunnius, former SEC enforcement attorney

I gift-wrapped and delivered the largest Ponzi scheme in history to them and somehow they couldn't be bothered to conduct a thorough and proper investigation. - Harry Markopolos, former investment manager, on Madoff

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Stung by Madoff, SEC Steps Up Pace, Triples Fraud Cases