Examiner.com – David Kotz, Securities and Exchange Commission Inspector General, told the U.S. House Committee on Financial Services last week he was determined to learn "the reasons for the SEC’s apparent failure to act" on repeated warnings about Bernard Madoff’s massive $50 billion Wall Street swindle.
The SEC had first been warned about Madoff in 1999 and again in greater detail in 2005 by Harry Markopolos, a Boston accountant and securities consultant. Markopolos noted several dozen "red flags" in a 19-page memorandum he prepared for the SEC that should have triggered agency interest in Madoff’s ponzi scheme.
Markopolos, a former U.S. Army Special Operations commander who led clandestine teams in Europe and Africa in the mid-1990’s, had made it easy for SEC officials by titling his 2005 report The World’s Largest Hedge Fund is a Fraud.
