Tuesday, December 16, 2008

Bernard Madoff Was an 'Admirer' of Arthur Levitt's SEC (and no wonder....)

In my last item I discussed how former SEC chairman Artie Levitt was vigorously protesting what I think is pretty obvious to everybody, which is that the SEC -- including Artie's SEC -- screwed the pooch when it come to discovering Bernie Made-Off's Ponzi scheme.

But now it appears that what we had was something of a mutual admiration society. Madoff, it seems, was an "admirer" of Levitt's -- which makes perfect sense. Hey, if you were getting away with murder, wouldn't you admire the dufus who let you do it?

A reader reminded me about this puff piece that appeared in Business Week in 2000, just as Levitt was leaving the SEC, as Artie was taking what Michael Lewis was to describe as a "victory lap" of admiring media attention such as the BW article. At issue was a completely inconsequential proposal for a "central limit order book," which is as trivial as it sounds and which Levitt was focusing upon as he ignored far more significant issues.

The BW article says:

For markets and brokers, "this is a life-and-death debate," Levitt says. He maintains that he hasn't made up his mind. But his public remarks emphasize the risks of fragmented trading over the advantages of market competition. That worries Schwab and other advocates of market-driven linkages. Even Levitt's admirers say he should slow down: "I'd hate for him to take [the competition] back a step by overreacting," says Bernard L. Madoff of stock wholesaler Bernard L. Madoff Investment Securities.
"Life or death debate." Yeah, right. Because of the SEC's nonfeasance under Levitt, the oafish Harvey Pitt and his incompetent successor Chris Cox, untold numbers of investors and philanthropies have been hacked to financial death by investing with Artie Levitt's "admirer".

UPDATE: Politico reports that Bernie was buying influence in Washington via the lobbying firm of Dow Lohnes.

As shown by public records, D-L also represents the corporate crime poster child Overstock.com in its jihad to waste regulator resources on the naked shorting hobgoblin. According to OpenSecrets.org, the cash-starved Internet retailer wasted $180,000 pushing Overstock CEO Patrick Byrne's paranoid fantasies.

As a result, regulators were so busy chasing down Byrne's imaginary demons that they neglected to properly investigate Artie Levitt's admirer and his real-life depredations.

© 2008 Gary Weiss. All rights reserved.

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