Whistleblower Tears Into SEC

clipped from www.cbsnews.com The man who waged a decade-long campaign to alert regulators to problems in the operations of fallen money manager Bernard Madoff told Congress Wednesday that he had feared for his physical safety. Harry Markopolos also assailed the Securities and Exchange Commission in his first appearance before lawmakers. The SEC failed to act despite receiving credible allegations of fraud from Markopolos about Madoff's operations over a decade. He told a House subcommittee hearing that "the SEC is ... captive to the industry it regulates and is afraid" to bring big cases against prominent individuals. The agency "roars like a lion and bites like a flea," Markopolos said. "The SEC was never capable of catching Mr. Madoff. He could have gone to $100 billion" without being discovered, Markopolos testified at the hearing. "It took me about five minutes to figure out he was a fraud."

Markopolos called the SEC "nonfunctional" and a drag on the US reputation as a financial leader. It's also too cozy with the people it was created to watch.

Markopolos said he determined there was no way Madoff could have been making the consistent returns he claimed using the trading strategy he touted to prospective investors.

Madoff, who was at one point chairman of the Nasdaq Stock Market and sat on SEC advisory committees, was "one of the most powerful men on Wall Street and in a position to easily end our careers or worse," Markopolos said.

He recommends "replacing its senior staff and establishing a central office to receive complaints from whistleblowers." I say fire everyone and start over.