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Markopolos: SEC Has Just One Bloomberg Terminal Per Office
A stunning claim just made by whistleblower Harry Markpolos helps further explain how the SEC failed to catch Madoff.
Referring to Bloomberg computer terminals, Markopolos said that the agency "might have one per regional office."
Bloomberg's terminals sit on the desk of almost every trader on Wall Street, providing a steady stream of live market data. It would be extremely difficult to detect sophisticated financial fraud without this basic tool of modern trading.
We've contacted current and former SEC sources to ask whether Markopolos' claim is accurate, and we'll keep you posted.
Late Update:
Reader FH writes in to say that Bloomberg terminals aren't useful for detecting fraud:
I'm a quant at a hedge fund, and have a bloomberg terminal that I share with a colleague.You detect fraud by runnnig statistical tests on data, or I suppose by forensic accounting (which I don't know anything about). Not by watching live scrolling news feeds or flickering prices on a terminal.
I would say you should take as your model the 1994 paper by Bill Christie and Paul Schultz that detected implicit nasdaq market maker collusion as how enforcement research is going to be done.
In my view, it does not help his credibility if Markopolos is talking about the paucity of Bloomberg terminals at SEC offices.
Late Late Update:
Robert Fusfeld, who retired in 2006 as a senior enforcement lawyer in the SEC's Denver office, confirms to TPMmuckraker that when he left, that office had only one terminal.
Josh
Zachary
it's the volume.
you don't need a heavy stat analysis to see that the open interest in the options market doesn't exist to support Bernie's claims of what he traded around the supposed assets. a bloomberg? you could pretty much figure that out with the CBT/CME websites IF ONE THOUGHT TO LOOK.
and, given that Bernie had $X billions under management and his only "fee" was the trading commish by his dealer-side, you'd think the sons running THAT business might have wondered where all that volume was? LIKE, GEE DAD - THROW US A TRADE ONCE AND AWHILE? YOU GOING AROUND US AGAIN, DAD? Yeah, I'm sure the boys were VERY shocked over the whole thing.
February 4, 2009 2:08 PM | Reply | Permalink
agree with justAnotherQuant in the case of Madoff's fraud.
the "Late Update" email was more about challenging the implied claim that the SEC generally couldn't do its job, or does it less well, without Bloomberg terminals.
February 4, 2009 4:34 PM | Reply | Permalink