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OpEdNews Op Eds    H3'ed 2/26/09

Re: Aspects Of The General Economic Disaster; More On The SEC's Culpability In Madoff.

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Message Lawrence Velvel

            But maybe the Simons revelation isn’t even the half of it when it comes to new revelations.  In a recent story New York Magazine claims the SEC looked at Madoff’s books when it was investigating Bienes and Avellino -- which was 1992.  “Bernie showed the SEC his books and maintained that he could return any money requested,” though many customers then decided to leave their money with him, says NYM. 


            But though it looked at his books -- probably cooked ones -- if the NYM claim is correct (as I suspect it is precisely because the SEC did publicly announce in the WSJ of  December 1, 1992 that there was no evidence of fraud, an announcement that makes it logical to think the SEC might have looked at the books), the SEC did nothing.  Why didn’t it demand to see the securities Madoff claimed to have?  Why didn’t it investigate whether the purchases and sales that he claimed to have taken place in the past had in fact occurred?  Why didn’t it especially do such things because it had started the investigation fearing a massive fraud, as was reported by the Wall Street Journal on December 1, 1992?  Why did it just take Madoff’s word for everything?  One assumes all this was because Madoff had so ardently and lengthily ingratiated himself with the SEC over the years, but who knows?  What we can say is that the SEC looked at Madoff’s books but did nothing, and this at a time when the Bienes and Avellino accounts apparently were only about one-half of one percent of what the SEC’s horrendous negligence allowed the fraud to become if Madoff’s claim about its size, when he was arrested, is correct.  The SEC’s horrendous negligence was thus a co-cause of about 49.5 billion dollars being lost to fraud if, as said, Madoff, when arrested, was correct about the size of the fraud.*


* This posting represents the personal views of Lawrence R. Velvel.  If you wish to comment on the post, on the general topic of the post, or on the comments of others, you can, if you wish, post your comment on my website,  All comments, of course, represent the views of their writers, not the views of Lawrence R. Velvel or of the Massachusetts School of Law.  If you wish your comment to remain private, you can email me at   

VelvelOnNationalAffairs is now available as a podcast.  To subscribe please visit, and click on the link on the top left corner of the page.   The podcasts can also be found on iTunes or at 


In addition, one hour long television book shows, shown on Comcast, on which Dean Velvel, interviews an author, one hour long television panel shows, also shown on Comcast, on which other MSL personnel interview experts about important subjects, conferences on historical and other important subjects held at MSL, and an MSL journal of important issues called The Long Term View, can all be accessed on the internet, including by video and audio.  For TV shows go to:; for conferences go to:; for The Long Term View go to:­_LTV.htm.


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Lawrence R. Velvel is a cofounder and the Dean of the Massachusetts School of Law, and is the founder of the American College of History and Legal Studies.
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