Lawmakers clash with SEC over Madoff probe

Lawmakers clash with SEC over Madoff probe
AP
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First Published: Thu, Feb 05 2009. 01 05 PM IST
Updated: Thu, Feb 05 2009. 01 05 PM IST
Washington: House lawmakers accused the Securities and Exchange Commission of impeding their probe into how the agency failed to uncover the alleged $50 billion fraud perpetrated by Bernard Madoff.
The clash between lawmakers and high-ranking SEC officials came at a hearing after the whistle blower in the case, Harry Markopolos, said he had feared for his physical safety and would turn over new evidence to the agency showing the alleged Ponzi scheme mastermind had not acted alone.
Markopolos said he had discovered a dozen additional funds that funneled money to Madoff, “hiding in the weeds” in Europe.
Managers of investment “feeder” funds that relayed money to Madoff willfully turned a blind eye to his improprieties because they were paid generous fees, Markopolos said.
He plans to present his findings to the SEC’s inspector general on Thursday. If proven, they would substantiate the assertions of many analysts that the alleged fraud was far too large for Madoff to have conducted alone.
Madoff, a prominent Wall Street figure who had been chairman of the Nasdaq Stock Market, was arrested in December after allegedly confessing to his sons that he had bilked investors in what the authorities say may be the largest Ponzi scheme ever.
Markopolos also planned to provide information on what he called a “mini-Madoff,” another Ponzi scheme he said he’s uncovered that may have defrauded investors of as much as $1 billion.
In loud, angry exchanges, lawmakers threatened to issue subpoenas to SEC officials to compel their testimony.
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First Published: Thu, Feb 05 2009. 01 05 PM IST