Khuzami And Walsh Testify Concerning The SEC's Failure To Identify Madoff’s Ponzi Scheme
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Robert Khuzami, Director of the SEC’s Division of Enforcement, and John Walsh, Acting Director of the SEC’s Office of Compliance Inspections and Examinations went before the U.S. Senate Committee on Banking, Housing, and Urban Affairs today.
Before discussing the “many changes we recently have initiated,” they recognized the Inspector General’s report on the SEC's failure to uncover Bernard Madoff's Ponzi scheme. “Stated simply, in this case we failed in our fundamental mission to protect investors, and we must continue vigorously to reform the way we operate.”
Khuzami and Walsh pointed out that the IG Report traced the SEC's “failure with Madoff to shortcomings in a number of areas, including insufficient expertise, training, experience and supervision by management; inadequate internal communication and coordination among and within various SEC divisions; deficiencies in investigative planning and prioritization; lack of follow-through on leads; and insufficient resources.”
The testimony is available at http://sec.gov/news/testimony/2009/ts091009rk-jw.htm.
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