Don't Blame The SEC

Don't Blame The SEC - 1/5/2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

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Don't Blame The SEC, You Shouldn't Expect Regulators To Catch Bigtime Financiopaths Like Bernie Madoff - That's Not How The World Works.
Allan Sloan

Fortune. January 5, 2009
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EXCERPT: Yes, there really are times when life imitates art. A case in point: the Bernie Madoff scandal, in which the disgraced investor bears a startling resemblance to Zero Mostel's sleazy theater promoter in one of my favorite flicks, "The Producers." What do the real-life Madoff and Mostel's fictional Max Bialystock have in common? They used the same principles to pull off a big-time financial fraud. These are: If you're going to steal, steal big. If you're going to cook the books, make up numbers of your own - don't try to doctor the real ones. […] How could the Securities and Exchange Commission, which admits it had gotten tips about Madoff for years, bring some penny-ante insider-trading claim against Dallas Mavericks owner Mark Cuban while failing to see that Madoff was ripping off billions from the likes of Elie Wiesel's foundation? Not to prejudge the SEC's investigation of itself, but I'll bet the answer will turn out to be that things have always been this way and probably always will be. If commission enforcers get a bigger budget and are treated with respect rather than being dissed (including, I'll bet, by some of Madoff's victims) as an obstacle to free markets, things may improve. But don't expect a fraud-free era to ensue. I'm saying this not out of cynicism but because I know how regulators generally work. I've seen it for years, in fields ranging from department stores to oil-drilling partnerships. You're likely to get caught if you run a few inches outside the baseline, because regulators are set up to catch that. But run so far out that you're playing on a whole different ball field? You can get away with that if you're enough of a financiopath, and your luck holds.

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