by Brian Mahany
Critics of the SEC have long complained about the way the SEC mishandled the Bernie Madoff affair. Missed opportunity is an understatement. Time and time again, whistle blowers warned of problems yet nothing was done. According to the Washington Post, now after several years several employees have been disciplined.
Disciplined. Not fired.
The SEC ultimately hired an outside consultant to review its handling of the Madoff affair and determine if any employees should be disciplined. In the end, the report concluded that the SEC had received six different warnings about Madoff.
The agency now says it disciplined 8 employees for mishandling warnings of Madoff’s crimes. The most serious discipline? Two employees received 30 day suspensions without pay. While hundreds of victims are out hundreds of millions of dollars, two employees will collectively lose several thousand dollars in pay. Unless, of course, they have vacation time on the books.
The SEC tries hard to stop Ponzi schemes but there are simply too many. When they do take action, their preferred remedy is a civil injunction. It sounds good in press releases but in reality, its little more than a court order saying “don’t do it again.”
Earlier today I posted a blog about Jerry Aubrey who was sanctioned by the SEC for selling bogus oil and gas investments. Unless one reads the fine print, most don’t realize that Aubrey was out on bail on state securities fraud charges while ripping off investors to the tune of millions of dollars. The SEC also doesn’t emphasize that Aubrey had previously been the subject of a prior SEC enforcement action for selling bogus investments. (Aubrey previously sold interests in a cruise ship that didn’t even exist.)
The SEC does what it can with what resources it has. The best protection against fraud is not the SEC, however. It is vigilance and due diligence. If you are the victim of a fraud, don’t depend on the SEC to get back your money. Look instead for “deep pockets” that may be liable for your losses and don’t waste time in bringing action. Accountants, auditing firms and stockbrokers or financial planners that recommend bad investments may often be held responsible.
If you are the victim of a fraud or investment scam, contact an experienced asset recovery attorney. The fraud lawyers at Mahany & Ertl have helped many people recover millions of dollars of their hard earned money.
Mahany & Ertl, LLC – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan and Portland, Maine. Services available in most jurisdictions.