On behalf of the members of the Madoff Coalition for Investor Protection as well as all innocent investors in the Madoff Ponzi scheme, we appreciate the efforts extended by SEC Inspector General David Kotz and staff to detail the failures of the SEC in its handling of the Madoff investigation over the last two decades.
With all due respect, the Inspector General's summary review does little more than confirm the assertions made by Harry Markopolos in his testimony to Congress on February 4, 2009. Mr. Markopolos defined the SEC as incompetent in its dealings with Bernard Madoff. The Inspector General reconfirms Mr. Markopolos' assessment.
Who else had regulatory oversight of Madoff over the years? The NASD and its offspring FINRA (Financial Industry Regulatory Authority). How did Mr. Markopolos define FINRA during his riveting testimony? He pointedly characterized FINRA as being 'in bed' with the industry.
We have learned that FINRA has its own multi-billion internal investment portfolio. This portfolio had hundreds of millions invested in hedge funds, fund of funds, private equity, and auction-rate securities amongst its overall holdings.
On August 10th, Amerivet Securities of Moreno Valley, CA filed a complaint against FINRA. This complaint requests that FINRA fully open its books and records for a thorough investigation of all its business practices, including its investment activities. The Madoff Coalition for Investor Protection fully supports this Amerivet complaint.
We know Bernard Madoff had longstanding and extensive relationships with the NASD, Nasdaq, and FINRA. In light of those relationships, who wouldn't support a requirement obligating a financial self-regulatory organization such as FINRA to open its books for an independent investigation? We call on the media, Washington, and Wall Street to support our call for this independent investigation of FINRA. The American public deserves nothing less.