2009-01-05 Madoff Chasers Dug for Years, to No Avail

2009-01-05 Kara Scannell Wall Street Journal \Bernie Madoff\US Securities and Exchange Commission\financial transparency http://online.wsj.com/article/SB123111743915052731.html Madoff Chasers Dug for Years, to No Avail Madoff Chasers Dug for Years, to No Avail  Bernard L. Madoff Investment Securities LLC was examined at least eight times in 16 years by the Securities and Exchange Commission and other regulators, who often came armed with suspicions.

SEC officials followed up on emails from a New York hedge fund that described Bernard Madoff's business practices as "highly unusual." The Financial Industry Regulatory Authority, the industry-run watchdog for brokerage firms, reported in 2007 that parts of the firm appeared to have no customers.

Mr. Madoff was interviewed at least twice by the SEC. But regulators never came close to uncovering the alleged $50 billion Ponzi scheme that investigators now believe began in the 1970s. It sounds like they spent a lot of time chasing stuff down only to find that there wasn't enough evidence to go further, so they settled for fixing the information gap in each case. Had the pattern gone on long enough, they would eventually have followed the trail to the real fraud, but obviously the damage would have been done long before.

Computerization of all the records would have made the pattern much more obvious or easy to check for, I should think. A simple question like "of the money which has gone through the account at any given time, what are the major sources, and where is that money now?" should be easy to get answers to; right now, it isn't. -

&ldquo;Bernard L. Madoff Investment Securities LLC was examined at least eight times in 16 years by the Securities and Exchange Commission and other regulators... [who] never came close to uncovering the alleged $50 billion Ponzi scheme that investigators now believe began in the 1970s.&rdquo;   