Those are the words that SEC Chairman, Christopher Cox uses as he describes his agency’s inability to ferret out the Madoff ponzi scheme despite “credible and specific warnings” going back to 1999. Cox goes on to say:
"I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them."
Besides ignoring warnings about Modoff’s investment practices, it turns out that Madoff had a family relationship connection to the SEC and Madoff personally:
sometimes consulted with the SEC on how to regulate markets and sat on a panel of academics, regulators and executives formed in 2000 to give the agency advice on new stock market rules in response to the growth of electronic trading.
Cox has been a one man clueless show throughout this entire economic meltdown. Among his more egregious actions, or lack thereof, were not requiring financial statement clarity for many of the “exotic” financial instruments, not removing mark to market requirements and issuing a statement that even further muddled the mark to market requirements.
Obama has yet to announce his choice for SEC chair although he reportedly has a list down to about four names. As with any political appointment, there will be some risk of ideology influencing focus and agenda. However, regardless of who Obama picks, it’s hard to imagine anyone on Obama’s list being as out of touch as Cox has been with his responsibilities. Cox is the poster child of “deeply troubling!”
POinted out by McIlheran:
And about regulation: Megan McArdle points out it’s easier to fool the SEC if you’re just making stuff up: "The SEC is looking for people pushing the envelope. It is not looking for people who have set fire to the envelope and substituted a piece of old newspaper recently used to wrap fish."
True, on my recollection. Large frauds are much easier to pull off than penny-ante ones–mostly because most people do not THINK the way large-fraudsters think.
The point is well made. I think most people believe that people are generally honest and that most problems are “errors” or “working the edges”. I think most folks find it hard to believe that there are people who make their living by lying big lies. Of course, now that I say that, it is exactly that naivete that causes some folks, I won’t name any names but he was just named “man of the year” to believe that there is no evil, just shades of grey and perspective!