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"Many of us have lost confidence in the SEC," a Congresswoman declares.
David M. Katz, CFO.com | US
January 5, 2009
The majority of congressional and senators are lawyers, with the exception of medical professionals where are the CFOs, CPAs or CMAs who are willing to get into politics and get into these committees to perform the oversight on the commissions, agencies and departments? I inquired numerous years ago from the AICPA and IMA about why there does not seem to be anyone with any financial or accounting experience in the halls of congress and never got a reply. Seems strange that we can discuss these issues yet never put our professional experiences to work to solve these issues.
Posted by Bob Kinsler | January 10, 2009 02:52 pm
The Markopolos warning letter to the SEC is a shocking document, in its detailed deliniation of more than two dozen red flags snapping in the breeze regarding Madoff's operation, and in the highly specific trail of evidence laid out for the SEC. Most shocking, I suppose, is the SEC's failure to follow the trail so clearly spread out before it. The whole 19 page document is a must-read, and can be found here: http://www.scribd.com/doc/9189285/Markopolos-Madoff-Complaint
Posted by Brodie Hefner | January 07, 2009 06:36 pm
Congress is concerned about the loss of confidence in the SEC? How about the loss of confidence in congress; the loss of confidence in the reglatory arm of government; the loss of confidence in our intelligence community; and the spread of this to our state governments. The solution is not political and is not limited to any of our malfunctioning parties but rather it is in compliance to regulations and laws designed to aid and protect or market place. Lessons learned: 1. A CPA license is a NOT of itself a statement of qualifications. The two level of qualifications are intelligence and capacity to perform. The most important part of any financial report is the assurance of the qualifications of the auditor. 2. CPA's both private and public should be concerned with compliance NOT results. 3. CPA's should focus on compliance as the major revenue of thier firm - not tax - not policy - not procedure. The audit opinion should be the most valued asset an auditor has in his firms offers. 4. Regulatory agentcy should focus on a) confirming the auditors ability to actually opine on the subject report. b) confirming the auditor actually tested and evaluated the contents of the subject report. and finally c) in the overall economic enviroment are the results viable and what proves the results viable. There is more compliance review, certification and assurance in a game of Texas Hold'um than we exercise in our economic systems by invstor, regulator or stock owner.
Posted by Milton Bulloch | January 06, 2009 09:36 am
Clearly, the SEC whiffed on this one. That is inevitable when attorney's are trying to act like accountants and investors. They may know the law but they don't know a debit from a credit or a balance sheet from an income statement. In this case they failed to catch the crook. In my case, they accused without any evidence. In both cases, people were damaged for life and the SEC bureacracy just goes on as if nothing happened. The answer is not more money or laws. More laws will only result in more criminals not more protection. More money will not protect investors. The focus needs to be on holding people criminally liable, not subject to a few hundred grand in penalties. Junk the SEC.
Posted by Dave Guenthner | January 05, 2009 09:57 pm
Great summary, in addition to looking at specific SEC divisions (Enf and OCIE) something I found significant in IG Kotz' testimony was that his investigation, as noted in his written testimony, will also address "The relationships between different divisions and offices within the Commission and whether there is sufficient intra-agency collaboration and communication between the Agency components to ensure comprehensive oversight of regulated entities." On the lighter side, Rep. Gary Ackerman (D-NY) later corrected his reference to "Jacques Clousseau," which you note above, saying he did not mean Jacques Cousteau (but rather Inspector Clousseau). You also do a great job of portraying how the Members of the Committee didn't pull any punches during this hearing. I would add to this list Rep. David Scott (D-GA) who asked IG Kotz: "How sure are you there is not some complicity with an insider person or persons at the SEC that has enabled this man [Madoff] to do this?" Scott added, "Get the culprits, you?ve got some folks working in the SEC that worked with Madoff that allowed this to happen, their heads have got to roll."
Posted by Edith Orenstein | January 05, 2009 09:35 pm
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