Bernard Madoff's Ponzi Scheme

Is it a case of hamstrung by bureaucracy, inexperienced investigators, misjudgment, improprieties or much more to it?

In a blistering Executive summary report posted on SEC’s web site on 2nd September 2009 by US SEC’s inspector general, states that the regulators missed “numerous” red flags that had led to Madoff‘s $65 billion Ponzi scheme and never did a “thorough and competent” probe despite complaints dating to 1992.

In spite of five probes and having caught Madoff in “lies and misrepresentations” SEC failed to follow up on inconsistencies. But for Madoff’s self confession of the crime in December 2008, the regulators would have never ever found out. The financial crisis has exposed many breakdowns in regulation, but none has involved such a large fraud by a single person.

The laxity of regulator in discharging duties for around one and half decades had only encouraged the fraudster to continue the crime audaciously for such a long period. The fraud left thousands of clients, including charities, retirees and celebrities, devastated. Such failures are unpardonable and do not act as deterrent.

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