10 Dumbest Things on Wall Street in 2008

DUMBEST OF 2008 #2

Christopher Cox Clouseau

By Gregg Greenberg, 12/19/08

Have no fear Madoff victims. Christopher Cox is on the case.

Securities and Exchange Commission Chairman Cox made his first major statement two weeks ago concerning the alleged $50 billion Bernard Madoff Ponzi scheme since the case was brought to light Dec. 11.

Cox, who will soon be replaced as SEC chief by Barack Obama nominee Mary Schapiro, assured the public that "every necessary resource" at the SEC has been dedicated to pursuing the investigation, protecting customer assets and holding those who may have been involved accountable.

Furthermore, while he can't share too much about the ongoing investigation, Cox revealed that "progress to date indicates that Mr. Madoff kept several sets of books and false documents, and provided false information involving his advisory activities to investors and to regulators."

Wow Chris! With detective work like that, you'll crack this case in no time.

Are you suggesting Madoff not only lied to the millionaires, charities, hedge funds and mom and pops, but to the SEC as well? Who would've guessed?

Sorry Chris, but you don't get off that easy.

Credible and specific allegations regarding Madoff's shenanigans were repeatedly brought to the attention of SEC staff going all the way back to 1999, but the commission failed to act on them. And even in your lame mea culpa, you admit that the "staff relied upon information voluntarily produced by Mr. Madoff and his firm" instead of getting off their duffs and doing some actual legwork.

Here's our idea to rectify the situation, and hopefully you won't ignore it like you did the many opportunities you had to nab Madoff. Instead of asking the SEC's inspector general to review the internal policies that led to this catastrophe, we suggest you hand the case to Inspector Clouseau.

Surely the bumbling French detective could do a better job than you or your commission.

Update 12/26: Bernard Madoff is out on $10 million bail, holed up with lawyers and bodyguards in his Upper East Side penthouse. Meanwhile, SEC agents are swarming Madoff's offices trying to piece together how they missed the largest fraud in Wall Street history when it was right under their noses. As for Cox, he'll soon be a memory -- a bad one -- on Wall Street once President Elect Obama is sworn in.