Financial Services Committee - 9-2-09, Bachus Statement on SEC Inspector General’s Report on Madoff Ponzi Scheme

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9-2-09, Bachus Statement on SEC Inspector General’s Report on Madoff Ponzi Scheme

September 2, 2009

- Ranking Member Spencer Bachus, the top Republican on the Financial Services Committee, issued the following statement today regarding the report by the Securities and Exchange Commission (SEC) Inspector General on the SEC's failure to detect the multi-billion dollar Ponzi scheme perpetrated by Bernard Madoff.

"The Inspector General's report paints a devastating picture of institutional failure on a grand scale. It is a tale of misplaced investigative priorities and an inability by SEC personnel to understand and act upon credible and detailed evidence of fraud over a period of almost two decades.

"The report confirms what I have been saying since the very first congressional hearing on this matter: that the Madoff case - which was essentially handed to the SEC on a silver platter - demonstrates not a lack of enforcement and oversight tools, but a failure to use them. This is a useful reminder that what we need is not more regulation, but smarter regulation and more aggressive enforcement to protect investors.

"Regrettably, federal personnel rules and resistance from federal employee unions all too often make it difficult to dismiss government officials for incompetence. Going forward, however, the administration, Congress, the enforcement agencies, and the investing public must demand accountability at all levels. Investors who lost billions in the Madoff Ponzi scheme deserve nothing less.

"To her credit, Chairman Schapiro has signaled her commitment to making the necessary reforms at the SEC to ensure this never happens again. But part of that process should include holding accountable those who ignored multiple warning signs of Madoff's fraud and allowed him to victimize thousands of innocent people. Actions, or, in the case of the SEC's handling of the Madoff matter, inaction must have consequences. Otherwise, we are doomed to repeat these episodes over and over again."