The failure of the SEC to catch major frauds early on proved to be a gigantic embarrassment to former commissioner Christopher Cox.
His reputation is in the tubes, as he’s been blamed for de-fanging the industry and making his Ayn Rand, laissez-faire ideology its official policy.
The fresh report on Madoff only underlines how bad the SEC had gotten, but it also shows that Chris Cox’s love of Ayn Rand was not its problem. The problem is that the SEC stunk up the joint and couldn’t find a Ponzi scheme when it was shoved up their noses. Even when Madoff thought for sure that he was going to be busted, the SEC flopped.
It’s obvious that the SEC has deep, deep problems with its structure, and its ability to hire inspired, aggressive, fraud-busting regulators. The problem existed before Chris Cox, and the failures during his administration did not have to do with staffing. Perhaps Chris Cox did make errors at SEC chief, but clearly they were not core to the agency’s problems.
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