Tuesday, January 27, 2009

More SEC Excuses

“We use virtually all our resources to pursue fires,” the
Securities and Exchange Commission’s enforcement chief, Linda
, said in draft testimony obtained by Bloomberg for a
Senate Banking Committee hearing today. “Additional resources
would give us the capacity to pursue smoke before it becomes a

It's a great line. It's even true, but it has always been true. The SEC is always at the scene, late, when the building is engulfed in flames.

Will more money make them faster? Maybe. I have always said that they were understaffed and overworked. But maybe they should work smarter, reallocate resources and stop wasting weeks of resources on 10,000 bookkeeping errors.

More to the point - as right as Ms. Thompson might be, that is not an excuse for missing Madoff. SEC examiners were on site. FINRA examiners were on site. Multiple times. They just missed the fraud.

It had nothing to do with resources.

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