After Bernie Madoff’s arrest last Friday for allegedly running a “Ponzi scheme” for the better part of the last decade, the question to consider now is where else to place the blame. Though Madoff was quick to acknowledge his involvement in the fraudulent activities the FBI accused him of, investors are wondering who dropped the ball when it came to catching Madoff before losses accumulated to over $50 billion. While suspicions rose a number of years ago, demonstrated most clearly by a 2001 article by Erin E. Arvedlund detailing Madoff’s questionable investing, regulatory bodies such as the Securities Exchange Commission failed to even investigate Madoff before he got himself, and others, in too deep. Despite Madoff’s previously esteemed reputation as chairman of the Nasdaq and renowned investor, it seems inevitable that he will be headed to prison for a sentence similar to those of the ex-Enron executives and the SEC will be facing a great deal of scrutiny for their big miss. As for those investors duped by Madoff’s scheme, being interviewed by the FBI is surely far from how they imagined spending their holiday.
blogger / December 16, 2008