SEC Inspector General H. David Kotz, who reviewed the agency’s Madoff probes for eight months, said he might propose that staff be required to verify random samples of trading data to ensure money managers are conducting transactions. SEC managers also should assign employees with “appropriate skills and expertise” to exams, Kotz said today in testimony for the Senate Banking Committee.
Tragically, this is not biting satire. It should be. After all, random sampling of data is a standard accounting audit practice. And assigning people with the proper skills to do the job should be a given. But apparently such practices were never implemented at the SEC, who now views them as being cutting edge and bold. Which is just pathetic.
Here’s what I’d like to see. Everyone involved with the SEC investigation of Madoff has their financial records and bank accounts examined to see if any of them profited personally from their stupendous and studied incompetence in investigating Madoff. This would include where they went to work after the SEC, if they changed jobs.
For Inspector Klutz to propose the obvious as a cure for what should have been done in the first place only demonstrates that he too is incompetent.