SEC Indifference Allows Madoff Scam

A person risked his career and possibly his life for repeatedly providing the SEC details of Madoff's investment scam that stole billions from investors worldwide. Over eight years, the SEC failed to enforce their own rules when presented with the red flags of fraud. Madoff's fund recently collapsed.

The SEC was repeatedly warned and failed to act. The government is showing it is unable to regulate even when they are repeatedly told of a fraud. More money to a failing government is not a reasonable solution.

A potential solution is less government "regulation" (which clearly doesn't protect the people) and forcing public disclosure so the people can do their own reviews. Allowing investigation and review by interested people is the solution and can be enabled by forced transparency.

The timeline of telling the SEC about the Madoff fraud:
http://www.foxbusiness.com/story/markets/industries/government/madoff-outrage-whistleblower-testimony-rips-sec/
Markopolos provided detail evidence to the Securities and Exchange Commission from 2000 to 2008 and said there was an abject failure by the regulatory agencies, said his testimony.
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Markopolos said he began his investigation into Madoff in late 1999 when a marketing executive from Rampart Investment Management Company Inc. told him of Bernard Madoff’s fantastic returns. Markopolos said he determined in less than four hours that Madoff’s operation was a fraud.
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In May of 2000, Markopolos said he contacted the SEC’s Boston office with his findings. The next year, Madoff spoke with Ed Manion in that office.
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Manion told Markopolos to send the information to the SEC’s New York Regional Office, which he said he did in late 2001. Markopolos said his report, “Madoff Investment Process Explained,” received no response.
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The following year, Markopolos said he flew to Europe on a business trip, where he spoke with 14 French and Swiss private client banks who bragged about Madoff, his returns and their “special access to him.” Markopolos said it was there he realized Madoff was running a Ponzi scheme.
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By October 2005, Markopolos said he finally met with the SEC’s Boston Regional Office Branch Chief, Mike Garrity. Markopolos said Garrity was “interested and fully engaged.”
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Later that year, Markopolos said he submitted “The World’s Largest Hedge Fund is a Fraud” to the SEC, which he details and numbers 28 red flags. Markopolos said Garrity referred Markopolos to New York Branch Chief Meaghan Cheung.
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Markopolos said he was always the one calling Cheung, and he said when he spoke to her she demonstrated a lack of interest. In an email Markopolos said he sent to Cheung in 2007, the whistleblower said, “when Madoff finally does blow up, it’s going to be spectacular, and lead to a massive selling by hedge fund, fund of funds as they face investor redemptions.”
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Markopolos said he continued that year and the next, finally sending his updated 2005 report to the SEC in 2008.
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“I tried calling back a few times but never got through and gave up,” said Markopolos.
By December the alleged Ponzi scheme had surfaced.