Friday, August 14, 2009

No Surprise Here: Auditors and Regulators Failed to Double-Check Madoff’s Bogus Info

By Greg Farrell and Brooke Masters

The bottom line was: the government was lax, and consequently people lost millions. Maybe if there were consequences for those lax people– like a big fat fine — others might not be so lax in the future.

Bernard Madoff’s $65bn Ponzi scheme was able to evade detection for years partly because auditors and regulators failed to double-check the information his firm gave them, court documents filed in the case of Madoff lieutenant Frank DiPascali suggest.

Mr DiPascali, 52, pleaded guilty on Tuesday to 10 criminal charges and is co-operating with prosecutors and the Securities and Exchange Commission. Based partly on his information, US authorities filed documents alleging how

Mr Madoff repeatedly deceived regulators and auditors with fake documents and false explanations that they apparently never questioned.

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