The Bernard Madoff scandal raises the question: What exactly is the point of the Securities and Exchange Commission? In spite of eight separate inquiries into Madoff’s operations, neither the SEC nor any other regulator penetrated the financial fog that obscured the scam. It was not for want of evidence: Madoff’s hedge-fund rivals eagerly fed information to regulators, and investigators determined that some branches of Madoff’s business were generating returns in spite of the fact that they apparently had no clients. Financial analysts were sending the SEC letters accusing Madoff of operating a Ponzi scheme as far back as the 1990s. This evidence was available to the SEC and to the Financial Industry Regulatory Authority (FINRA), which tsk-tsked Madoff for relatively minor technical violations. As a reward for this crack detective work, Obama is naming FINRA boss Mary Schapiro to head the SEC. As much as the lumpen Left would like to characterize the Madoff scandal as a case of deregulatory excess, we note that the relevant regulation here is still very much in force: "Thou shalt not steal."Agreed--twice.
Friday, January 16, 2009
From the January 26th National Review on dead tree (subscription only):