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

Flawed process allowed Ponzi schemes to go undetected

(NEWSER) - The SEC's haphazard method of dealing with whistleblowers means violations go unpunished and frauds left uncovered for years, insiders say. Many informants—including one whose information could have exposed Bernie Madoff's Ponzi scheme—say they were ignored, misunderstood, or sidelined after approaching the regulator with tip-offs, the Washington Post reports. More»

(NEWSER) - The SEC's inspector general says the agency had plenty of chances to take down Bernie Madoff and whiffed on every one, Bloomberg reports. In a report released today, H. David Kotz writes that the SEC received "detailed and substantive complaints over the years to warrant a thorough and comprehensive examination” of Madoff. And yet it never performed a "competent investigation or examination." More»

Eight employees got disciplined, however

(NEWSER) - SEC staffers managed to miss Bernie Madoff's Ponzi scheme for more than a decade despite numerous warnings, but that is apparently not a fireable offense. The agency disciplined eight employees involved in the case, with the most severe punishment being a 30-day suspension coupled with a demotion, reports the Washington Post . The others got a range of lesser penalties, including pay cuts and, in one case, only a "counseling memo." More»

Judge gives partial victory to both sides in lawsuit

(NEWSER) - The New York Mets' owners may have to return some of $300 million in profits they made dealing with Bernie Madoff, but their $700 million principal is probably safe. A judge has decided that for trustee Irving Picard to pursue the Mets owners' principal investment, he must prove that they were "willfully blind" to the fraudulent nature of Madoff's enterprise, the Wall Street Journal reports. The ruling could make it harder for Picard to win back large sums from others. More»

Ohio man accused of running $16.8m Ponzi scheme

(NEWSER) - We've had the Bernie Madoff of campaign treasurers , so now meet the Amish Madoff. A 77-year-old man in Ohio is accused of scamming thousands of investors in 29 states, mostly his fellow Amish, out of $16.8 million. Prosecutors say Monroe Beachy ran a Ponzi scheme for decades, telling investors he would invest in safe securities, but instead putting their money in riskier ones and sending them false account statements, ABC reports. Beachy, who declared bankruptcy earlier this year, faces up to 20 years in jail if convicted. More»