"By accepting improper gifts from brokers, these individuals squandered the most important commodity in the financial services industry — investor trust," said George Curtis, the SEC's Deputy Director of Enforcement.
Meanwhile, Bernard Madoff’s investment advisory business, alleged to be a Ponzi scheme that cost investors $50 billion, was never inspected by the SEC after he registered in September 2006, Bloomberg is reporting.
Generally, the SEC scrutinizes a newly registered firm's books in the first year and then checks them at least every five years.
Bloomberg goes on:
Since 2000, he has given at least $100,000 to the Democratic Senatorial Campaign Committee and more than $23,000 to the party’s candidates, including Senator Charles Schumer of New York and Senator Frank Lautenberg of New Jersey, who leads a charitable foundation that invested with Madoff.What for?
“You can see where people would pull the shades down over their eyes in terms of recognizing what could be one of the great frauds of our time,” former SEC Chairman Arthur Levitt said in a Bloomberg Television interview.
Of course, Madoff sat on a committee formed in 2000 by Levitt to advise the agency on new stock-market rules in response to the growth of electronic trading.
Anyone trying to get close to the SEC is doing it for a reason. There are hundreds of SEC rules suggested by real smart guys on Wall Street who do it because it will make them millions. The SEC implements these rules without really having a clue as to who benefits and why. In some, cases there are probably less than a half dozen guys that understand a regulation, but those guys are minting money, courtesy of the SEC.
As for Levitt, since leaving the SEC, he has become senior adviser to the Carlyle Group and a board member of Bloomberg LLC.
The poor schmucks who got busted taking free Red Sox tickets, no advisory board connections, no big time political donations, but also not running $50 billion ponzi schemes.
The SEC is a dangerous agency. It does more harm then good by its power to regulate. It can never change, since it is a government agency that will be beholden to political pressure. It needs to be shut down, today, before it completely ruins the stock market, with its absurd enforcements, while real financial crime and cronyism grows because of the very existence of the SEC.
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