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The SEC was perhaps the largest single enabler in the escalation of the Madoff fraud.

As you know, the SEC’s Office of the Inspector General issued a report in 2010 that alleged that the SEC had been highly negligent and helped escalate the fraud. Not only did the SEC fail to unmask the fraud when they had sufficient evidence to do so as early as 1992, it missed critical follow-ups of investigations over five times, and dismissed extensive evidence supplied by Markopolos and others. It effectively provided a “seal of approval” that legitimized the fraud in a manner that overcame skepticism and critique, amounting to massive financial devastation to those the SEC is entrusted to protect.

It’s important to consider legal action now. NIAP, based upon legal input, strongly believes that victims are entitled to damages because of the SEC’s role in the fraud. Moreover, we believe that an important message must be delivered to all regulatory entities that they are charged by Congress with a responsibility to protect the public, and that without consequences for negligent behavior, accountability and protection are eviscerated. Finally, keeping pressure on the SEC also helps leverage further commitments for investor protection.

We must caution victims, however, that the courts thus far (see legal opinion here) have not been supportive of NIAP’s position. Still, we urge victims to seek counsel quickly on this issue.

Please read the attached for information on the deadlines, and please speak to your attorney quickly on this issue if you have filed a tort claim. The SEC Action Center provides a list of attorneys who have filed suits against the SEC.

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