Looking back on Bernard Madoff's crimes, the nation's courtrooms, newspapers, magazines, and blogs have repeatedly asked the same question: how. How could this happen? How did he get away with it? Perhaps most importantly, how did he fool so many people for so long?
One answer lies in Madoff's resume. In addition to his years as a successful trader, the famed fraudster was Chairman of the Board of Directors of the National Association of Securities Dealers, a self-regulatory organization that oversees the securities market. However, as impressive as this position is, it pales beside the job that, according to him, was almost within his grasp.
While he was being investigated by the Securities and Exchange Commission, Madoff allegedly intimidated his examiners by claiming to have high-ranking friends in the organization, according to a report released today by the SEC's inspector general. The report probes the agency's handling of Madoff's swindle.
Intriguingly, Madoff even predicted Christopher Cox's appointment to head the commission a few weeks ahead of the event, according to the report. While this may have been a good guess, it could also suggest that Madoff was receiving insider information from high-level officials in the SEC.
According to his examiners, Madoff also claimed that he was on the short list to follow Cox in the SEC chairmanship. Like many of his claims, it should probably be taken with a grain of salt.
Then again, given the lax state of federal oversight in the financial markets, it is interesting to imagine Madoff as chair of the commission. One has to wonder if he would have taken the opportunity to ravage the hen house or if, like a latter-day Roy Cohn, he would have been vicious in his pursuit of his fellow transgressors.
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