US stock market watchdog admits lack of action in Madoff scandal

December 17th, 2008 - 8:24 pm ICT by IANS  

Lehman BrothersNew York, Dec 17 (DPA) The top official in charge of watching over US stock markets, Christopher Cox, admitted that his agency had failed to act for nearly a decade on suspicions concerning the dealings of alleged Wall Street fraudster Bernard Madoff.In a statement Cox, who is chairman of the US Securities and Exchange Commission (SEC), said the agency had received allegations going back to 1999 about Madoff.

Cox said there had been “credible and specific allegations” of wrongdoing by Madoff and that the allegations had been “repeatedly brought to the attention of SEC staff, but were never recommended to the commission for action.”

Instead of using its subpoena powers to get information from Madoff, Cox said, the SEC had “relied upon information voluntarily produced by Mr. Madoff and his firm.”

He said the SEC was undertaking an internal probe to investigate what he called the “deeply troubling” revelations about Madoff, who is suspected of having defrauded investors of some $50 billion.

For the SEC, the Madoff case poses further credibility problems, after the agency had already come in for criticism in the wake of the collapse of Bears Stearns and Lehman Brothers Holdings Inc.

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