Madoff noted that there are two schools of thought on how to deal with [SEC] exams:
1. Make the examiners crazy, make things difficult for the examiners. In connection with this, Madoff noted that every firm keeps books and records differently, and that having an examination is “like getting
a tax audit, it’s a pain in the arse.”).
2. Cooperate with the examiners, make it easy (which Madoff stated is what “we always did.”). Madoff stated that SEC examiners didn’t always look at the big picture issues, rather, they focus on minutia. He stated that he didn’t have any suggestions as to how to fix that problem. However, he stated that he believed the problem with SEC examiners is a combination of the “experience they have and the procedure they use.”
He said, “It all comes down to budgets, I guess.”
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