Summary Box: SEC watchdog recommending new system for handling tips to prevent Madoff repeat
By APWednesday, September 30, 2009
Summary Box: SEC IG urges changes after Madoff
MADOFF AFTERMATH: To prevent another breakdown like the Bernard Madoff fraud, the Securities and Exchange Commission’s inspector general is recommending a new system for handling the thousands of tips and complaints the agency receives, among other changes.
CHANGES AT THE SEC: Inspector General David Kotz says it should be easier for junior-level enforcement attorneys to bring their concerns to top managers, and that people with backgrounds in Ponzi schemes should be put on investigating teams.
WHY IT’S NEEDED: The SEC bungled its five investigations of Madoff despite numerous red flags raised over 16 years by outsiders. Kotz says the enforcement staff investigating Madoff was inexperienced and lacked adequate guidance on how to analyze complaints.
