SEC officials dodge questions; one claims privilege

Feb 4, 2009 @ 5:26 pm

By Dan Jamieson

Members of the House Financial Services subcommittee on capital markets, insurance and government-sponsored enterprises hammered SEC officials today at a hearing looking into the alleged Bernard Madoff Ponzi scheme.

Agency officials declined to comment specifically about how they missed the fraud after being tipped off over a number of years by Harry Markopolos, a fraud investigator who formerly worked for a hedge fund that competed with the Madoff fund.

They said an ongoing investigation by the Securities and Exchange Commission inspector general kept them from commenting.

At one point during the hearing, SEC acting general counsel Andrew Vollmer claimed executive privilege in declining to answer some questions.

Subcommittee chairman Paul Kanjorski, D-Pa., asked Mr. Vollmer if he had obtained executive privilege from the U.S. attorney general.

“No ... this is the position of the agency,” Mr. Vollmer said.

Did the SEC instruct him not to respond to questions? Mr. Kanjorski asked.

The commission supports this position, Mr. Vollmer said, but “the answer is no.”

Mr. Kanjorski asked if Mr. Vollmer was asserting executive privilege on his own.

“No, I wouldn't say that,” Mr. Vollmer said.

SEC spokesman John Heine did not have an immediate response.

Mr. Markopolos, appearing for the first time before a congressional committee, skewered the SEC. He detailed his frustrations in attempting to get the SEC to look into the Madoff operation.

The “financial illiteracy among the SEC’s securities lawyers was pretty much universal with few exceptions,” he said in prepared testimony.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Why ESG strategies are appealing to women investors

Women and millennials want to invest in strategies that align with their value system. Debra Ohstrom of Allianz Global Investors explains.

Latest news & opinion

Since banking scandal, Wells Fargo advisers with more than $19.2 billion leave firm

Despite a trying year, the firm has said it will sweeten signing bonuses for veteran advisers.

Is LPL's deal sweet enough for NPH's 3,200 reps and advisers?

They will have to decide if the signing package they are being offered by LPL makes sense. A lot is hanging in the balance.

Eduardo Repetto to leave Dimensional Fund Advisors

Gerald O'Reilly, currently co-CIO, will take over as co-CEO with David Butler.

Alternative strategies boomed after crisis, but haven't been tested

Because the S&P 500 has outperformed, convincing clients they need protection is a hard sell.

7 ways advisers fixed clients' biggest financial dilemmas

Sometimes it takes creativity, along with knowledge and outside help, to get a client out of a jam.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print