Bernie Madoff Tricked and Charmed the SEC

Bernie Madoff knew how to push the buttons of SEC examiners. SEC Inspector General David Kotz says junior examiners were easily impressed by Madoff. "They sat with Bernie Madoff for hours a day, he told them stories about how he was on the short list to be the next SEC Chairman and gave them information and dropped a lot of names.

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" The examiners took his word, when they should have checked his records. It's interesting to hear from Madoff himself how he worked the SEC. He knew the Commission was concerned about "front-running" and would shy away from looking into proprietary trading strategy.

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In a more than hour long December 2005 call to the Chief Risk Officer of the Fairfield Greenwich fund, he brags about how easy it is to deflect questions from examiners, at one point saying, "You know, you don't have to be too brilliant with these guys, because you don't have to be." You can listen to the entire Bernie Madoff audio tape below.

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The Inspector General's explains how easy it could be, saying the SEC dismissed numerous warnings because they weren't made from insiders with the investigation brought to the agencies "wrapped up in a bow.

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" Some worry the SEC may now go too far and rush to judgment in order to boost the number of cases brought, especially to small and mid size firms, without impressive brand names that may impress junior staffers who have aspire to work there when they leave the agency.

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