Wall Street controls the SEC

President Barack Obama needs to kick down the door to the SEC, and start slamming nerds through computers.

Why?

Harry Markopolos, a former financial securities industry executive, led an independent investigation into Bernie Madoff’s ponzi scheme in 2000.  He wrote a letter to the SEC entitled “The World’s Largest Hedge Fund Is a Fraud.”

The SEC never responded.

Markopololos and some fellow financial people investigated the scheme for eight years, followed Madoff’s crew across two continents, and wrote countless letters urging the SEC to intervene.

The SEC ignored him.

The 2008 financial meltdown inevitably shed light on the ponzi scheme, and Madoff now sits in prison.

But Markopolos said last night on the Daily Show that everyone who worked at the SEC during that time is still working at the SEC… more than a year after it became obvious that the SEC did not lift a finger to investigate the biggest ponzi scheme of this decade.

The problem, he said, is two-fold:

“No. 1… the  institution is captive to the industry it is supposed to regulate.  They work for Wall Street; not for us investors,” Markopolos said.  “And No. 2: they’re over-lawyered.  Lawyers can never chase finance people; [finance people] will outsmart them every time… I’d love to get in there – I’d fire most of their staff on day one, and replace them with finance people.”

When asked why the SEC doesn’t already consists of financial experts, Markopolos replied, “because lawyers won’t catch any of the financial crimes, and that’s the whole point.”

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