The SEC gave Congress a little tease about what happened at the Commission re: totally missing the boat on this Madoff thing. But then again, not really.
Inspector General David Kotz made recommendations about ways that the Commission could improve its oversight over the financial industry because, obv, it had nothing to do with the fact that no one there had the background to detect classic Ponzi schemes.
Some recommendations that Kotz made included giving the PCAOB more oversight including jurisdiction over accounting firms that audit investment advisors and broker-dealers. That’s just what the PCAOB needs, more on its docket because it gets things done so quickly.
Kotz would also like to see an amendment to the Securities Act of 1940 that would require investment managers, including hedge funds, to place their securities with custodians that are registered with a national exchange. Kotz claims that this would prevent investment advisers from fraudulently using the proceeds received from new investors to pay old investors (a la Ponzi).
That’s all fine and dandy but Rep. Paul Kanjorski, of Pennsylvania has been asking for details on the Madoff ball dropping for the last two weeks and the Commission has been stalling. Kotz could only state that the Commission is “proceeding ‘in an expeditious manner.'”
Translation: We don’t have any idea how we missed the biggest Ponzi scheme in history.
Best we can expect, Kotz says, is that the report to be issued by the end of August. Which might be enough time to get Kanjorski involved in a sex scandal and maybe this will all just go away for the Commission.
S.E.C. Previews Its Madoff Report [DealBook/NYT]
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We come with news this afternoon about more layoffs at G to the T that are rumored to have gone down earlier this month.
This latest information we have involves two managers and two senior managers in the Los Angeles office were shown the door around the first of the month. Our source has indicated that the breakdown was three in the audit practice and one in tax. These latest cuts would be in addition to the original ten that we reported on last month for LA.
If you have more information on these layoffs or have details on a different GT office, get in touch with us or discuss in the comments.
Earlier: Layoff Watch ’09: Grant Thornton
Your 2009 Halloween Costume: Zombie Phil Mickelson
It’s only three days until Halloween and most of you are probably procrastinating on costume ideas. Fortunately we’ve come up with an idea that will incorporate your profession/firm and maybe your love of golf.
Inspiring examples, after the jump
You can go black:
Or white:
Small problem: The only place that we’ve been able to find a KPMG golf hat is on eBay and the auction doesn’t end for four days. Good news is that’s going for grand total of $0.01. So if you don’t already own one of these beauties, it’ll have to wait until next year.
SEC Promises to Suck Less Post-Madoff
It what amounts to a serious case of too little, too late, the SEC says that it will do more to protect investors in the wake of the Madoff scandal.
M. Schape and Co. would like you all (House Financial Services Committee) to know that they have been busy though. Working late. Working weekends. Working hard:
regulatory proposals include restricting short-selling in down markets, strengthening oversight of mutual funds, tightening scrutiny of investment advisers and making it easier for shareholders to seat directors on company boards. The S.E.C. is also working to identify emerging risks to investors, including so-called dark pools, or automated trading systems that do not publicly provide price quotes, Ms. Schapiro said.
See? Doesn’t that make you feel better? We’re the SEC, getting better at being less clueless since 2009.
S.E.C. Plans to Protect Investors More Post-Madoff [DealBook/NYT]