x Abu Dhabi, UAESunday 23 July 2017

Madoff case sparks investigation

The US financial regulatory body will launch an in-house investigation into why it did not detect the alleged $50bn Madoff fraud sooner.

The Securities and Exchange Commission (Sec), the US financial regulatory body, said today it would launch an in-house investigation into why it did not detect the massive Bernard Madoff alleged fraud case sooner after almost a decade of warning signs. The Sec "has learned that credible and specific allegations regarding Mr Madoff's financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the commission for action," said the Sec chairman Christopher Cox.

Mr Madoff, 70, is the alleged mastermind of a US$50bn (Dh184bn) fraud shaking financial institutions worldwide. "I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations," Mr Cox said. "A consequence of the failure to seek a formal order of investigation from the commission is that subpoena power was not used to obtain information." Mr Cox said he has "directed a full and immediate review of the past allegations regarding Mr Madoff and his firm and the reasons they were not found credible, to be led by the Sec's Inspector General".

Mr Madoff is free on a $10m bond, but will be in court today to establish whether he has met bail conditions set after his arrest last week. * AFP