The SEC has also settled lawsuits against J.P. Morgan Securities (JPM), Wachovia Capital Markets, and Goldman Sachs for misleading investors in securitized debt packages, such as collateralized debt obligations, during the financial crisis. It has created a special asset management unit to pursue hedge funds. This is refreshing for an agency that failed to detect hedge fund manager Bernie Madoff’s $65 billion Ponzi scheme despite repeated warnings from money manager Harry Markopolos. In a U.S. Senate hearing after Madoff’s December 2008 arrest, Markopolos said, “The typical SEC staff attorney would have trouble finding ice cream in a Dairy Queen.” More on Bloomberg Businessweek here.
