SEC Inspector General David Kotz, who is conducting an investigation into the agency’s failure to detect Bernard Madoff’s alleged “$50 billion ponzi scheme” despite conducting several probes of Madoff’s business over the last decade, testified before Congress today.
And from the sound of his opening statement, his inquiry could be worth paying attention to.
Here, paraphrased, are a few highlights from the statement:
- Kotz has asked SEC employees to preserve relevant documents.
- He has sought information from the office of SEC chair Chris Cox, and with senior officials from the agency’s compliance section, whose performance is at the heart of concerns that the SEC fell down on the job.
- He has obtained emails sent by former and current employees, both those at the Washington DC headquarters and in the New York and Boston regional offices.
- He hopes to add four new investigators to his team, and is seeking additional office space and administrative help.
- He has scheduled an on-the-record interview with Harry Markopoulos for later this month. Markopolos, who first rasied concern about Madoff’s business in a lengthy complaint to the SEC, was scheduled to testify before Congress today but cancelled, citing illness.
- He’ll probe conflicts of interest at SEC stemming from Madoff’s and his family’s relationships with SEC officials.
- He’ll also look at the overall operations of the enforcement division.
- And his probe will be “independent and as hard-hitting as necessary.”
More news from today’s hearing to follow…