Why SEC missed Madoff

Whistleblower Harry Markopolos tells "60 Minutes" this Sunday that the agency has too many lawyers - and not enough financial sleuths. "What I found from my dealings with the SEC over eight and a half years is that their people are totally untrained in finance," he says. "Most of them are just merely lawyers without any financial industry experience." As you may remember, Markopolos kept going to the SEC with all sorts of damning documentation against Madoff, but nothing ever came of it. Some other nuggets from a CBS preview:

--"[The SEC] can check every piece of paper perfectly and find misdemeanors and they'll miss all the financial felonies occurring…even when pointed to fraud they are incapable of finding fraud, that's how bad they are."

--"I would say that hundreds of people suspected something was amiss with the Madoff operation. If you look at who the victims were not, you'll notice that the major firms on Wall Street had no money with Mr. Madoff."

--"I would talk to the people I had trading relationships with and ask 'Did you have a trading relationship with Mr. Bernard Madoff?' And they all said 'No. We don't think he's for real.'"

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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