Today Congressman Dan Maffei reacted to the Security and Exchange Commission’s internal review that found, despite multiple warnings from credible sources, the SEC failed to properly investigate the Madoff hedge fund. The SEC missed numerous opportunities to expose the Madoff hedge fund because untrained investigators did not know how to read relevant evidence. The SEC also failed to follow up with basic enforcement procedures that would have uncovered Madoff as a fraud years ago.
Congressman Maffei responded to the report and said: “The victims who lost their pensions, retirement funds and life savings need an explanation as to why their government failed to protect them, and I think they deserve compensation for their losses. If corporations had produced products that maimed consumers, they could have relied on federal oversight and product recalls. Under those circumstances, lawsuits would be filed and victims would have their day. Because the Madoff fraud was complex and financial, our government oversight and regulatory system seems to be treating it differently, but the consequences are just as severe.”
In January, several local labor unions and businesses in Central New York discovered that employee pension plans were seriously jeopardized by fraudulent investments made with Bernard L. Madoff Investment Securities, Inc. Congressman Maffei is working to have a hearing before Congress where representatives from these unions could explain what happened to their pension funds.
In February, following a Congressional hearing into the Bernard Madoff investment scandal, Rep Maffei and Rep Arcuri sent a letter to the chairman of the SEC, Mary L. Schapiro, demanding top-down restructuring at the SEC to prevent investment schemes.
Congressman Maffei said: “This report sadly is not a surprise. The SEC failed, many times, in many ways. There were basic phone calls that were never made that would have uncovered Madoff as a fraud years ago, preventing incredible pain and financial loss. There was also a failure at the SEC to understand more complex data that showed that the success of the Madoff hedge fund was not just improbable, but impossible. I will continue to fight for both the victims who were financially devastated by the Madoff hedge fund, and I will fight for answers from the SEC about how this possibly could have been over looked.”
And in March, Congressman Maffei and the Financial Services Committee recommended the SEC receive a budget increase of 13 percent, or $118 million, over 2008 levels of funding, with the intention of strengthening the agency’s enforcement and inspections and examination functions. This Financial Services Appropriations bill passed by the House included $76 million in additional funds to strengthen the SEC’s enforcement capabilities.
