SEC set to face Madoff grilling

5 January 2009

The Securities and Exchange Commission (SEC) is to face a grilling from US lawmakers over its handling of the Bernard Madoff affair, according to reports.

The regulator is expected to "come under fire" later today when members of the House of Representatives' financial services committee hears from one of the Wall Street broker's alleged victims, as well as SEC inspector general David Kotz, Bloomberg said.

Mr Kotz is currently leading an internal investigation into the organization's market oversight and its alleged failure to act on a series of "credible and specific" warnings about Mr Madoff dating back to 1999.

However, Harry Maropoulous, who claims he informed the SEC of the broker's supposed wrongdoing, will not be appearing before the committee due to ill health.

Commenting on the hearings, attorney Donald Langevoort told the site: "The SEC will have to defend its existence."

Meanwhile, Democrat representative Paul Kanjorksi of Pennsylvania said the testimony could help inform a "substantial rewrite" of US financial markets law.

Outgoing SEC chairman Christopher Cox has previously said he is "gravely concerned" at the regulator's apparent failure to formally follow-up on warnings about Mr Madoff.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development