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SEC pleads the fifth in Madoff inquisition?
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The anemic response of the Securities and Exchange Commission to inquiries into its equally anemic Madoff investigation is worrisome, especially at a time when the change of administrations seemed to offer hope of more robust enforcement.
Right now the Commission looks pretty wimpy.
Attorney and securities law blogger Thomas Gorman, a partner at Porter Wright, recently published an insightful commentary on the recent SEC response to congressional inquiries.
A brief excerpt that illustrates why the rest is worth reading:
Since the SEC officials were not protecting a law enforcement investigation it appears that in reality they were invoking the Fifth Amendment last week. What was really being protected is the reasons the Commission did not follow up on lead after lead about Madoff from as early as 1992. This has nothing to do with a law enforcement investigation, but everything to do with whether the agency carried out its statutory duties.
It is more than ironic that an agency which routinely penalizes individual who appear before it for citing their constitutional privileges (discussed here) is now, in effect, doing the same thing. At a minimum, it was a wholly inappropriate invocation of privilege and, perhaps worse, a violation of the Commission’s obligations to report on its activities to congress and the American public.
The whole mess is starting to have that nasty, Nixonian stonewalling feel that emanated from the Congressional investigation of the SEC's firing of Gary Aguirre when he attempted to continue a politically unpopular investigation ...
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