Other than the investors in Bernie Madoff’s fund, the biggest loser here is the SEC. The regulatory agency, ostensibly charged with protecting investors (ha!), has been warned about Madoff’s fund since 1999:
WSJ: Harry Markopolos, who years ago worked for a rival firm, researched Mr. Madoff’s stock-options strategy and was convinced the results likely weren’t real.
“Madoff Securities is the world’s largest Ponzi Scheme,” Mr. Markopolos, wrote in a letter to the U.S. Securities and Exchange Commission in 1999.
Mr. Markopolos pursued his accusations over the past nine years, dealing with both the New York and Boston bureaus of the SEC, according to documents he sent to the SEC reviewed by The Wall Street Journal.
Their defence, perhaps: Yes, but we’re going hard after Mark Cuban.
Again, how can anyone argue that the SEC is equipped to start regulating hedge funds? Get ready for hearings.
The Moral Hazard Of SEC Registration