The mastermind of the biggest ‘Ponzi" scheme in history, Bernard Madoff, told the SEC Inspector General David Kotz why the US regulators failed to catch his big fraud.
In a jailhouse interview Bernard Madoff said he was much surprised when the SEC could not discover his multi-billion-dollar fraud before December last year.
Mr. Madoff said investigators failed to check basics such as checking his clearinghouse account and his dealings with the firms that were supposedly handling his trades.
In 2004, he was sure enough that investigators would check his clearinghouse account, but they did not. Again in 2006, investigators asked for his clearinghouse account number, however they never followed up because of his high reputation.
Speaking on the issue, Mr. Madoff said, "It never entered the SEC's mind that it was a Ponzi scheme."
Those simple steps could have revealed the realities of Mr. Madoff’s Ponzi scheme years earlier.
Bernard Madoff was arrested in December 2008. Now he is serving 150-year prison term.