Lawmakers gave officials from the Securities and Exchange Commission a severe tongue-lashing yesterday over investment fund manager Bernard L. Madoff, accused of running nothing more than a $50 billion Ponzi scheme.
Members of a House Financial Services subcommittee were angry at the SEC officials for two reasons: failing to catch Madoff before he defrauded investors despite detailed and ample warnings from whistleblower Harry Markopolos, yesterday's star witness, and failing to answer specific questions about Madoff, citing a form of executive privilege.
Time and again, SEC enforcement chief Linda Chatman Thomsen and acting general counsel Andrew N. Vollmer said they were unable to answer the panel's questions because the agency itself is being investigated by its inspector general for the way it handled Markopolos's tips, which came to the SEC nearly a decade ago.
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