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SUNDAY, NOVEMBER 22, 2009
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2 Madoff Victims Sue SEC

Regulators are responsible for victims' losses, suit claims

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(Newser) – Two investors who lost a combined $2.4 million to Bernie Madoff’s ponzi scheme have sued the SEC for negligence. The lawsuit argues that the commission should reimburse the plaintiffs for their losses because it failed in its duty to protect investors. Regulators had "countless opportunities" to catch Madoff "and botched all of them," it says.

"Instead of watching the backs of ... investors, the SEC—through its negligence—was effectively watching Bernie Madoff's back," says the plaintiffs' attorney, reports CNNMoney. "Now it is time for the SEC to be held accountable and for the federal government to do what the law says it must do: compensate the victims for its negligence."

Besieged money manager Bernard Madoff arrives at Federal Court in New York, Wednesday, Jan. 14, 2009.
Besieged money manager Bernard Madoff arrives at Federal Court in New York, Wednesday, Jan. 14, 2009.   (AP Photo/Stuart Ramson)
Bernard Madoff, chairman of Madoff Investment Securities, returns to his Manhattan apartment after making a court appearance Wednesday, Dec. 17, 2008, in New York.
Bernard Madoff, chairman of Madoff Investment Securities, returns to his Manhattan apartment after making a court appearance Wednesday, Dec. 17, 2008, in New York.   (AP Photo/Jason DeCrow)
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Through its negligent actions and inactions the SEC caused Madoff's scheme to continue, perpetuate and expand, and directly caused the plaintiffs to lose more than $2.4 million.
- Phyllis Molchatsky and Steven Schneider's lawsuit

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9 comments
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Nelstorm
Oct 14, 09 3:37 PM CDT
Maybe they should sue their parents for giving them low IQs. Reply
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godawgs
Oct 14, 09 3:43 PM CDT
well they lost a combined 2.4 million but how much money did they originally invest with Madoff? Reply
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citygirl
Oct 14, 09 3:53 PM CDT
SEC employees directly responsible for the oversight should be held criminally responsible. Reply
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IN RESPONSE:
sysco9
Oct 14, 09 5:07 PM CDT
but even if they're found guilty, how would they even pay it back?
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Spudsy
Oct 14, 09 4:04 PM CDT
I have said several times before that these people were victims of their own greed. But I do wonder what I would have done given the opportunity to get a 12 percent return by investing with the great Bernie Madoff. A peon like me researching him would have only found good things, the guy was Chairman of the NASDAQ stock exchange, he had been doing business since 1960, the only warning sign would be the incredible rate of return. And I would have seen that as a good thing while wondering how he did it. Be honest. Would you have invested if offered five years ago? Reply
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