Description

SEC Commission Office of Investigators: Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme

As the WSJ points out, it is hard to come up with any description of the SEC that doesn't prominently feature the word, "bungling." Missed opportunities include:

* After apparently vetting Madoff and releasing a report clearing his name, 25 people invested.

* A May 2003 email from a hedge-fund manager citing 'indicia of a Ponzi scheme;' the agency sat on this until December 2003 and instead opened an investigation into front-running, ignoring most of the concerns cited by the hedge-fund manager to instead focus on the area of expertise of the senior examiner in charge of the investigation. Possibly because, as Gawker points out, he wanted a promotion and bringing in external expertise doesn't yield promotions.

* James Simons' Renaissance Technologies was so concerned they pulled their money out; the SEC, after becoming aware of this, failed to further investigate.