Comments on: The SEC Madoff investigations: shockingly inept

By: waltj

waltj — Sat, 05 Sep 2009 12:49:54 +0000

Yes, third-party checks are absolutely basic and necessary to any audit. If an auditor or examiner doesn’t do them, then he is essentially taking the examinee’s word for what’s in the books. You don’t have to be a CFE or forensic accountant to know how to do this. I learned it in my regular accounting curriculum (although the CFE program reinforced the requirement). Not to do these checks is negligence/malfeasance of the worst type.

By: Jim

Jim — Sat, 05 Sep 2009 12:11:29 +0000

The fact that the SEC intended to conduct some third party records checks after Bernie’s testimony and failed to carry out that very simple task is proof of gross negligence. Worse, that task may have been cancelled by someone higher up. These checks on external records from third parties are routine for all audits and investigations. Indeed, the worksheets for audit programs have these tasks there to be checked off and initialed by an official. At the very least, there should be mass firings of some high level people at the SEC.

By: EL Rider

EL Rider — Fri, 04 Sep 2009 19:22:00 +0000

The claim of a need for expertise does sound very strange. This isn’t difficult stuff as far as derivatives go, which kind of begs a few questions concerning her employment and that Yale degree.

By: I R A Darth Aggie

I R A Darth Aggie — Fri, 04 Sep 2009 19:07:16 +0000

Lawyer Cheung will be able to find a promotion over to the new Health Care Benefits Administration, determing who should and shouldn’t get an MRI.

By: Jennifer

Jennifer — Fri, 04 Sep 2009 16:02:18 +0000

GOOD NEWS!!! There is finally a great movie out about stock market manipulation, the SEC, and short selling called: “Stock Shock.” Amazon has it or stockshockmovie.com has a trailer.

By: Jim

Jim — Fri, 04 Sep 2009 02:05:37 +0000

Neo: I have friends who are lawyers too. They are pretty smart people but they are not auditors or investigators and most of them know that. Lawyers without a heavy financial background should know when to call in experienced auditors or Certified Fraud Examiners (CFE). The SEC has lots of legal investigative powers and could have easily done a proper investigation using outside contractors to do the heavy lifting in a good audit. Experienced professionals could have figured Madoff out fairly quickly which explains why Bernie himself was so shocked that he wasn’t found out earlier. One question is why did the SEC send a bunch of easily intimidated kids to do the work of grownups? Who was the adult in charge? Could someone high up in the SEC purposely have sent neophytes knowing they would’t be smart enough to find anything? Bernie had lots of friends in the SEC. Perhaps Congress should appoint a special prosecutor! At this point, I wouldn’t trust the SEC to investigate themselves.

By: Gringo

Gringo — Thu, 03 Sep 2009 23:14:46 +0000

And the Demos want to increase government control of everything! This posting is not exactly an indication that things will improve when we do increase government control.

A company is only as good as its operations manuals, and when the operations manuals for the USG are the thousand of pages of gobbletygook that comprise US Code, Houston is not the only place that has a problem.

More clowns at the wheel…

By: Mel Williams

Mel Williams — Thu, 03 Sep 2009 22:14:33 +0000

On overlooking the obvious – in the Garridos kidnap/rape case, a simple look at a bird’s eye view of his property (easily available on the internet) by the visiting parole/police officers would have blown this thing open a long time ago.

By: Ozyripus

Ozyripus — Thu, 03 Sep 2009 21:49:12 +0000

Thomass raises the related, interesting question of whether “career” government employees are more competent than political appointees.

In my, not small, experience with technical government workers, the less the competence, the greater the care to ensure the career. Competence is no more, possibly somewhat less frequent in government service than private enterprise. Worst is that it is almost impossible to terminate for incompetence in government.

My question is if Ms. Cheung is another case of an Affirmative Action hire, or, more probably, promotion? . . . . Probably not, probably just the arrogance of lawyers hiring lawyers.

By: Thomass

Thomass — Thu, 03 Sep 2009 21:26:01 +0000

So they sound about as competent as the CIA….

I’m assuming they were career members and not political appointees.