From “The World’s Largest Hedge Fund is a Fraud.” by Harry Markopolos filed with SEC in 2005. (pdf)
Red Flag #20. (pg. 11) Madoff is suspected of being a fraud by some of the world’s largest and most sophisticated financial services.
Madoff red flags were there all along. Yet the SEC ignored all the signs. One reason: SEC Commissioner Cox who “worked to dismantle the SEC” rather than enforce the laws. That’s right, the person in charge of the SEC was a neocon zealot who saw his task as destroying very institution he headed. This is a view I would charitably call deranged. But this indeed is the spawn of Reagan and Bush. Destroy all regulatory agencies.
SEC in “complete panic” over Madoff. Now that their deliberate incompetence has been revealed, that is. Hopefully some of them will get indicted along with losing their jobs.
Picower Foundation loses $1bn due to Madoff, closes. How could a foundation with $1 billion dollars have all their money managed by one company? This violates the most basic tenets of investing and I’m baffled as to how this could have gotten got ok’ed. Yet they are hardly the only foundation to have made such a stupid, rookie mistake. Who were their investment advisers?
Markopolos concludes:
Conclusion 3. (pg. 14) In my financial industry experience, I’ve found that whenever there’s one cockroach in plain sight, many more are lurking behind the corner out of plain view.
Precisely. Who is behind him that we don’t see yet? This is large scale organized crime that went on for decades. Lots of people had to be in on it and lots more had to have been bribed or compromised.