TPMMuckraker

Failing Upward: Many SECers Who Failed To Catch Madoff Haven't Paid A Price

Share

Twitter Facebook Fark Reddit Send to a Friend

Send to a friend!

To email:    Your Name:    Your email:

Ever wonder what happened to the SEC staffers and supervisors who, for nearly two decades, managed to miss Bernie Madoff's multi-billion dollar Ponzi scheme, despite a persistent whistle-blower and multiple inquiries -- a monumental level of incompetence that "astonished" even Madoff himself?

Well, some saw their failures rewarded with high-paying private-sector jobs, while others are still at the agency, charged with catching the next Madoff.

Via CNN, here's a quick look at what happened to some of the major players.

Name: Richard Walker
Misstep: In 1992, Walker, at the time the director of the SEC's New York office, led a probe of an investment pool run by two Florida accountants, Frank Avellino and Michael Bienes, which offered suspiciously high returns, and for which Madoff served as money manager. Despite what the New York Times described this year as "numerous red flags," the inquiry petered out after Avellino was assessed a small fine. Avellino continued to send money to Madoff, whose role in the operation appears never to have been looked into.
Where is he now?: Since 2001, Walker has served as general counsel to Deutsche Bank.

Name: Demetrios Vasilakis
Misstep: Vasilakis, who joined the SEC out of college in 1990, was a member of the examination team that investigated the Madoff, Avellino, and Bienes operation -- and was left in awe. He told investigators for the SEC inspector general's report (pdf) on the Madoff fiasco, released last month: "My personal conclusions [from the examination] were that [Madoff] was a pioneer in the industry... when I walked out of there it was more along the lines of wow, this guy is a third-market guy that does X percent of the volume on the exchange."
Where is he now?: Vasilakis is now chief compliance officer for the hedge fund Atticus Capital.

Name: Gary Ward
Misstep: In May of 2000, Ward, an enforcement official in the SEC's Boston office, met with Harry Markopolos to discuss a formal complaint that the whistle-blower had filed, questioning the legitimacy of Madoff's returns. Markopolos concluded that Ward "didn't even have a basic understanding of finance," as he put it to the IG investigators. According to that report, Ward told a colleague that he would refer the complaint to the North East regional office, but never did.
Where is he now?: Ward is now senior counsel for MetLife Group.

Name: Arthur Levitt
Misstep:As chair of the SEC from 1993 until 2001, Levitt met with Madoff "on an infrequent basis," he told the IG's office. "It never occurred to me or anyone on my staff that Madoff was anything except a market maker," he said to CNN.
Where is he now?: Since 2001, Levitt has been a senior adviser at the Carlyle Group, a politically connected private equity firm.

Name: Linda Thomsen
Misstep: Thomsen, who ran the SEC's Enforcement Division from 2005 until February 2009, told the IG's office that she was "generally aware of Madoff's firm but did not recall being aware that the Enforcement Division had received any tips or complaints about Bernard Madoff or Madoff's firm prior to December 2008." That account ignored, of course, Markopolos's famed November 2005 memo entitled "The World's Largest Hedge Fund is a Fraud."
Where is she now?: Thomsen is now a partner at Davis Polk.

Name: Simona Suh
Misstep: Suh was the staff attorney assigned to the 2006 Madoff inquiry, after joining the SEC out of law school in 2004. After a deeply flawed investigation, as detailed by the IG's report, Suh recommended closing the case, finding no serious wrongdoing by Madoff. She subsequently received the highest possible performance rating. (Suh's recommendation to close the case was reviewed and signed by Doria Bachenheimer, assistant regional director in the New York office, and Meaghan Cheung, branch chief of the New York Enforcement Division, both of whom resigned in 2008.)
Where is she now?: Suh replaced Cheung as branch chief of the New York Enforcement Division.

Join the Conversation!

11 comments

Recommend Recommend (5)

October 13, 2009 10:31 AM   

Hopefully, reasonable, Oversight and Accountability with appropriate proper and forthright resolves will be forthcomming to the concerns of this Article.

Attache are briely some views that would, hopefully provide provide to accomodate for those concerns for resolve and seemingly in accodance with our US Constitution, Democracy, Laws, Rules and Regulations and towards our Declaration of Life, Liberty and the Pursuit of Happiness for all.

--attachment from recent and again prior blog comment reply--

Very briefly and again,

1) All the many leading Democratic Countries do not have the enactment of the Death Penalty and have held steadfastly to those mandatory cornerstones of Democratic Principles of Law.

2) By proper respect, regard and most importantly interpretation of Democratic Law the enactment of the Death penalty is impossible, period and including the end to torture in all its forms, applications, ecetra, period.

3) A brief additional suggestion is that the White House immediately keep its many verbal, written and campaign promises and not do the opposite thereof as the record clearly and unmistakeably has recorded!!!!!!!!!!

Even though I feel I have been personally betrayed by these so-called 'Whistleblower' Organizations of;
1) Government Accountability Project (GAP)
2) National Whistleblower Center (NWC)
3) Project on Government Oversight and Accountability (POGO)
4) and many or most all of our US Executive, Legislative and Judicial Officials

I continue to request that President Barack Obama keep his written campaign promise to the National Whistleblower Center and immediately bring to a full floor vote the 'Federal Employee Whistleblower Protection Enhancement Restoration Act' and hopefully the Sabersky Plan that from my impression has been well received and not the second signing statement of President Obama that from published reviews has increased the retaliations upon Whistleblowers and the harmful effects thereof upon all.

Posted by tpmreader
-------------------------------------------------------------

As the wrongfull loss of life, torture and illegal and/or wrongfull!! secrets, ecetra!! especially in a Democratic Society and within all proper and forthright interpretation of all Democratic Law and in proper and forthright respect and regard to Religions, God, Man and Country, especially our Country that rightfully it is always a very serious concern and wrongful application and especially in just one example, is that our proud and courageous 'We the People', Declaration of Independence declares, Life, Liberty and the Pursuit of Happiness for all.

I have attached a blog comment reply that I previously replied on a TPM 7/24/2009 Rep. John Conyers Article.

--------------------------------------------------

Illegal Secrets, Illegal wars and funding therof, Illegal Renditions, Torture, Illegal, false and fraudulent Signing Statements, FISA Suppresion and many other High Crimes and misdemeanors are not covered by the false and fraudulent use of 'Executive Privilage'.

You do not need a so-called blue ribbon panel.

You need a special prosecutor and our US Senatorial and Congressional Leaders to do their job of representing 'We the People' and not suppresing and holding our US Democratic Government 'Nugatory'.

Impeach Bush et all and as necessary Obama et all, NOW!!

Why not ask Rep. Chairman Conyers for an update on his 'Presidential Powers and Its Limitations' "Impeachment Hearings' NOW!! ongoing from 8/2008

While your at it, ask President Obama about his 2nd Signing Statement which, as reported Enhanced Retaliations against 'Whistleblowers' 'Truthtellers' and is opposite of his written promise to the National Whistleblower Center' to support Whistleblowers, Truthtellers.

Also ask President Obama about his assigned AG Representative whom tesitfied, at best, to delay Justice = 'Justice Delayed is Justice Denied'.

While your at it, ask President Obama as he ran against the inactment of the Death penalty, that he in fact wrote inactment of Death penalty legislation and during his Campaign actually advocated for the execution anactment of a minor and/or a disabled person.

While your at it, ask President Obama and US Senate Judicary Committee why he choose Holder as US Attorney General (whom as was reported was against the enactment of the death penalty) as to Holder as Top Attorney under President Regan//Negroponte 'School of the Americas' in the Iran Contra and the Death Squads in Nicaragua, Guatamela ecetra and the top Attorney with Dole Foods and/or Chiquita in those corrupt many items that are continuing to this day and as recently reported on DemocracyNow.org and archived for public viewing.

Ask Rep Conyers and his Committee NOW!! as it could easily be presumed he and his Committee must have, and as stated, an abundance of additional Information, ecetra.

Posted by tpmreader
July 24, 2009 7:04 PM |

Posted by tpmreader in reply to a comment from hawaiian
October 10, 2009 3:54 PM | Reply | Permalink


In my view, briefly and importantly, I noticed a few days ago that President Obama and his/our Executive Branch of our US Government has written to our US Legislatures, US Senate and Congressional Representatives to add, this week, an ammendment to a forthcomming Legislative Bill to once again violate our US Constitution, Bill of Rights of at least the first Ammendmendment, to supress the torture that is done in our 'We the People' name and implement another State Secrets to deverit from our US Supreme Court the ability to hear this matter.

In my view, if this US Executive Branch of our action is correct;
1) I find it impossible that any US Legislature could vote on this matter.

Thank you for your time and consideration.

Sincerely,
TPM Reader

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

October 13, 2009 10:54 AM   

The topic is MADOFF, Ponzi schemes and the SEC. Not the place for your tangential rants.

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

October 13, 2009 11:16 AM    in reply to traitorjoe

Understood. Just a play, play game to you?? Neverending so-called 'Traitor Joe' witisism without any insight into accountability, oversight and the resolves, thereof??

My apologies to you and others for any undue inconvenience of my blog comment reply.

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

October 13, 2009 11:30 AM   

Leaving aside your criticisms of my witticisms ... the so-called watchdogs allow the crimes to happen, and are rewarded for doing so. We need to pass a law that regulators cannot work for the banks, hedge funds, investment banks, etc. for 3 years after they leave government jobs so they won't be tempted to look the other ways when obvious crimes against investors, shareholders and the public are being committed.

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

October 13, 2009 11:52 AM    in reply to traitorjoe

My apology for my criticism of your witticism as usually your blog comment replies are not a direct ad-hominen attack and are usually, I presume well appreciated. Also, I hope we agree that our intent is not to be offensive to others.

Please note that my exasperated and frustrations are from a US Constitutionally, Bill of Rights mandate for 'Oversight and Accountability'!!

1) Therefore, there should be no doubt and no question to doubt that it is mandatory for REP. Chairman John Conyers and his/the/our US Congressional Committee, properly and forthrightly, continue and complete their 8/2008 'Impeachment Hearings' ' Presidential Powers and ite Limitations'.

2) The 'Federal Employee Whistleblower Protection Enhancement Restoration Act' in its intirety, be immediately brought to a full floor vote and hopefully with the cultural change that is needed.

Again, my apologies.

Thank you for your time and consideration.

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

October 13, 2009 12:30 PM    in reply to tpmreader

Way to go, tpm reader. You apologize for your intrusive and unrelated post by taking the opportunity to once again espouse your cause. Anyone actually interested in the topic at hand, SEC corruption, is forced to wade through your stuff to find a comment worth reading.

Josh Marshall is kind enough to provide a public forum for you to post to your heart's content about any topic under the sun but no, you have to jump into a post that you think might be widely read so you can get a wider audience for your cause.

How rude.

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

October 13, 2009 12:50 PM    in reply to Mrs Panstreppon

I disagree.

The needed 'Oversight and Accountability' and hopefully the resolves thereof, are clearly correct and point 'spot on'.

I certainly will adhere to your advice and try to find the Josh Marshall, public forum you mentioned, should there be any need for a more elaborate response within these repiticious concerns from recent decades. or !

Again, my apologies for any undue inconvenience.

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

October 13, 2009 1:26 PM    in reply to tpmreader

As a TPM member, you have your very own personal blog. I suggest you use it.

This isn't the first time you've pulled this stunt and somehow, I don't think it will be the last given your responses. I don't suppose it has escaped your notice that no one has complimented you ever on bringing an issue to their attention.

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

October 13, 2009 2:01 PM    in reply to Mrs Panstreppon

Thank you for your first sentance.

Your second paragraph is somewhat ad-hominen without any sense and incorrect.

I presume there are many hear that are highly educated and professionals and it is not my intent to be an undue inconvenience, my apologies.

Although, I do find it dissapointing that so many and those in Washington, DC and in our US Executive, Legislative and Judicial Branches of our Government have provided no response.

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

October 13, 2009 2:07 PM    in reply to tpmreader

Correction: second sentence ....somewhat ad-hominen and to some extent incorrect and ambigiously pointedly indirect....

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

October 13, 2009 11:47 AM   

Hell I wonder if everybody knew, but Madoff's Ponzi scheme was "too big to fail" so all looked the other way and hoped it would crumble on somebody else's watch.

I mean folks were paying taxes on money they really weren't making.

Reply | Flag Abuse

Are you sure this comment violates TPM's Terms of Service?

Leave a comment

Your response:

Follow us!

Most Popular

TPM Stories Now Surging on