The depth of the SEC’s corruption was the target of vehement attacks by house lawmakers  today, says AP:

“Because of the SEC’s inaction, “I became fearful for the safety of my family,” Markopolos said.

“The SEC is … captive to the industry it regulates and is afraid” to bring big cases against prominent individuals, Markopolos said. The agency “roars like a lion and bites like a flea” and “is busy protecting the big financial predators from investors.”

While the SEC is incompetent, the securities industry’s self-policing organization, the Financial Industry Regulatory Authority, is “very corrupt,” Markopolos charged. That organization was headed until December by Mary Schapiro, President Barack Obama’s new SEC chief.

Markopolos discovered additional funds that funneled money to Madoff — whose managers he said willfully turned a blind eye to his improprieties because they were paid generous fees. Markopolos said he will present his findings to the SEC’s inspector general. If proven, they would substantiate the assertions of many analysts that the alleged fraud was far too large for Madoff to have conducted alone.

In New York, a trustee liquidating Madoff’s investment firm told a federal judge Wednesday that nearly $950 million in cash and securities has been recovered for investors. Trustee Irving Picard said $111.4 million in cash had been recovered from financial institutions and about $300 million in securities were identified although it was unclear what they were worth.

JPMorgan Chase & Co. and Bank of New York Mellon Corp. last week said they would transfer a combined $534.9 million from Madoff’s investment firm accounts to Picard. Investors have until July 2 to place their claims.

European investors who feared they lost millions investing with Madoff have a chance to recoup some or all of their money from the banks that marketed the stricken funds, according to lawyers in Europe who are preparing a possible U.S.-style class-action lawsuit….”

Comment:

That’s a typically American- style solution – class-action lawsuits.  And normally, that would not be a bad thing. But  there is something deeply troubling and suspect about the way the SEC’s actions are being represented as mistakes…as though changing a few rules will improve things.

These people are corrupt…..sell-outs…swindlers…what other words can I muster?

This isn’t about rules. It’s about culture.

We don’t need new laws. We need new people.