This week’s headlines have been plastered with news stories about the alleged fraud perpetrated by Bernard Madoff. A scammer who managed to defraud investors out of $50 billion over the last ten years.
The Washington Post reveals how “New York financier Bernard L. Madoff, the man behind the scam is talking with federal prosecutors about how he swindled thousands of investors for so long.” One can only wonder how it is that one person managed to get away with such a crime for so long, especially considering the scandals of Enron, Parmalat and others like them only a few years back.
The big question surfacing over the past few days as news about Madoff’s scandal hits the headlines is tackled in an article in the New York Times. The big question being “Where the hell was The SEC (Securities and Exchange Commission) when all this was talking place?” Ironically the article reports: “The commission said it received credible allegations about the scheme at least nine years ago and will immediately open an internal investigation to examine why it had failed to pursue them aggressively.” – even more shocking!
Who are investors supposed to trust nowadays? And where are the state institutions that have been put into place to protect investors from this?
I guess the only “positive” side to all this is that this time round it wasn’t the small investor and households that got hit. On Yahoo News in an article from the Associated Press, one can read: “List of victims in alleged US Ponzi scheme include world’s big banks, the rich and the famous” and goes on to listing the biggest victims which “include international banking institutions HSBC Holdings PLC of Britain, Royal Bank of Scotland Group PLC and Man Group PLC, Spain’s Grupo Santander SA, France’s BNP Paribas and Japan’s Nomura Holdings.” Nevertheless, one cannot help but wonder what effect will this have on those institution’s clients?
And last but not least while reading the press release on the Securities and Exchange Commission website one cannot help but wonder how a Ponzi Scheme scandal could go so far in today’s financial world. And although the following statements are somewhat reassurring one cannot stop to ask where was the SEC when this scam was started: “We are alleging a massive fraud — both in terms of scope and duration,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement. “We are moving quickly and decisively to stop the fraud and protect remaining assets for investors, and we are working closely with the criminal authorities to hold Mr. Madoff accountable.”
Related news articles:
2 Comments