Where were the auditors in the Madoff Ponzi scheme?
According to testimony before the Senate Banking committee Madoff's hedge fund Ponzi scheme was allowed to continue for 30 years because of limited resources, fragmented oversight and lack of coordination between regulators. Okay, so the SEC and the banking folks didn't pay attention, but where were the auditors who were supposed to verify the non existent assets?
If someone has an answer to this question, or can direct us to an answer, please comment!
posted by James R. Martin @ 7:00 AM
2 comments
2 Comments:
See Jensen's comments for a start at http://commons.aaahq.org/posts/d8b96a1c05
The main part of Jensen's note is as follows.
"...Madoff's brokerage firm was audited by an obscure 3-person accounting firm that is not registered with the Public Company Accounting Oversight Board. This was permitted because the SEC exempted privately owned brokerage firms from the SOX requirement that firms are audited by registered accountants". "...Floyd Norris reports, in today's NY Times, that the SEC has now quietly rescinded that exemption. As a result, firms that audit broker-dealers for fiscal years that end December 2008 or later will have to be registered. However, under another SOX provision, PCAOB is allowed to inspect only audits of publicly held companies".
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