My father forwarded this message to me via e-mail from a friend of his (not sure of the origin). I’m not taking sides here, but I think it’s interesting enough that it deserves examination. Would love to hear opinions on this before I share my own.
Henry Markopolos (JP Edit: actually Harry Markopolous… but it’s OK), the man who waged a decade-long campaign to warn regulators about the operations of money manager Bernard Madoff, told a congressional panel yesterday that the Securities and Exchange Commission (a government agency with nearly 3,800 employees and a salary budget of $620 million taxpayer dollars) is incompetent and that the Financial Industry Regulatory Authority, the securities industry’s own policing organization, is corrupt.
Markopolos said the SEC is “captive to the industry it regulates and is afraid to bring big cases against prominent individuals.” He also said that “the SEC was never capable of catching Mr. Madoff. He (Madoff) could have scammed up to $100 billion” if he chose.
The SEC “roars like a lion and bites like a flea” and “is busy protecting the big financial predators from investors,” Markopolis told the panel.
While the SEC is incompetent, the securities industry’s self-policing organization, the Financial Industry Regulatory Authority (with nearly 3,000 employees and an annual budget of $500 million dollars), is “very corrupt,” Markopolos testified.
In 2008 the Financial Industry Regulatory Authority levied fines against financial firms totaling $40 million. 2008 was the third straight annual decline in fines levied by the authority. The total was 73% below the $148.5 million in fines collected in 2005.
And who was heading the Financial Industry Regulatory Authority? None other than Mary Schapiro, who is now the head of the Securities and Exchange Commission. She was nominated by President Obama and unanimously confirmed by the Senate.
So the head of a very corrupt authority is now the head of an incompetent authority. Nominated by an inexperienced President and confirmed by an inept Congress. Is it any wonder the economy is in trouble?