The U.S. Securities and Exchange Commission, a once-proud agency with an impressive history as the top cop on Wall Street, finds itself increasingly conducting autopsies of leading financial institutions after failing, in the first instance, to perform adequate biopsies.<\/p>\n
The latest black eye for the commission came when it was disclosed that inspectors and agency lawyers had missed a series of warning signs at Bernard L. Madoff Investment Securities. If it had checked out the warnings, the commission might well have discovered years ago that the firm was concealing its losses by using billions of dollars from some investors to pay others.<\/p>\n
The firm was the subject of several inquiries over the years, including one last year that was closed by the agency’s New York office after it had received a referral of potentially significant problems from the Boston office.<\/p>\n
Similarly, the commission’s chairman, Christopher Cox, assured investors nine months ago that all was well at Bear Stearns, which collapsed three days later.<\/p>\n