The world's biggest fraud could have been averted if the Securities and Exchange Commission (SEC) had acted on numerous warnings about Bernard Madoff's financial impropriety years ago, the regulator's chairman admitted last night.
Christopher Dodd, the chairman of the Senate Banking Committee, yesterday demanded information from the SEC to ascertain how such a fraud could have taken place, a scandal which was only discovered because Mr Madoff's sons contacted the Federal Bureau of Investigation.
As a result of the "apparent multiple failures," Mr Cox has asked the agency's inspector general to investigate contacts between SEC staff and Mr Madoff and his family.
The inquiry is expected to include the relationship between Mr Madoff's niece Shana Madoff and a senior inspections and examinations official, Eric Swanson, whom she married in 2007.
So why, if the SEC (i.e. the government) screwed this pooch, is the taxpayer expected to make good on the losses?