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The SEC, from lapdog to watchdog

In the early days of the Obama administration, I sat in a Capitol Hill hearing room and listened to Harry Markopolos, the whistle-blower in the Bernie Madoff scandal, bemoan the toothless Securities and Exchange Commission. The SEC, which ignored his warnings about Madoff, is “captive to the industry it regulates, and it is afraid of bringing big cases against the largest, most powerful firms,” he said. “The SEC continues to roar like a mouse and fight like a flea. . . . I gift-wrapped and delivered the largest Ponzi scheme in history to them, and somehow they couldn’t be bothered to conduct a thorough and proper investigation.” But since then, the private investigator has come upon a rather different trail of evidence. “There’s a total sea change at the agency,” Markopolos told me Tuesday. “They are aggressive. There’s no more free passes on Wall Street. They eagerly seek out big cases. . . . They used to be industry’s lapdog and now they’re actually an investor’s watchdog.” More in the Washington Post here.

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