Madoff scheme

March 11, 2009

Editorial

Bernanke the enforcer

Federal Reserve Chairman Ben S. Bernanke called Tuesday for a new, "holistic" approach to regulating the financial industry, including a mix of tougher and more flexible measures to avert another global meltdown. But as Congress works to improve safeguards for depositors, investors and taxpayers, it needs to bear in mind something that happened in a Manhattan courtroom later in the day: Former Nasdaq Chairman Bernard L. Madoff signaled that he would plead guilty to operating one of the costliest securities frauds in history. As Madoff's example illustrates, even the best regulations won't do a bit of good if they're not rigorously enforced.

December 18, 2008

Editorial

The SEC's $50-billion Madoff lesson

The alleged $50-billion swindle by broker-dealer Bernard L. Madoff has rocked investors like nothing since the epic Enron securities fraud. But while the Enron debacle pointed out holes in the regulatory fabric, the Madoff case appears to have been a failure to enforce the laws already on the books. We look forward to an investigation into why the Securities and Exchange Commission whiffed on at least two swings at Madoff's operation, which he reportedly has acknowledged was a Ponzi scheme in the guise of a sophisticated trading strategy. But more than that, we hope the Obama administration will bring a more workable approach to securities law -- one that relies on simpler, clearer rules that are better enforced.