A former Securities and Exchange Commission lawyer who recommended questioning discrepancies in records from Bernard Madoff's firm five years ago says supervisors derailed her efforts by excluding her from key conference calls with the convicted Ponzi-scheme fraudster.
Genevievette Walker-Lightfoot, a former SEC lawyer and lead investigator in a probe of Madoff's firm in 2004, raised questions to her supervisors about trading abnormalities she noticed in Madoff's records.
She told Dow Jones Newswires in a telephone interview that an initial conference call between Madoff and other members of her examination team on Feb. 4, 2004, occurred without her knowledge or a request from a supervisor for Walker-Lightfoot to participate.
Walker-Lightfoot, who also doesn't recall participating in another telephone conference between her team and Madoff in March 2004, says her absence from the conversations meant she couldn't ask questions that could have contributed to uncovering the fraud years earlier.
Her version of the events reveals possible gaps in the 477-page report by the SEC's inspector general, H. David Kotz, about his investigation into the agency's repeated bungling of its multiple Madoff probes. Walker-Lightfoot says the report too broadly paints the examiners as inexperienced and of limited expertise, and focuses too little on the actions of higher-ups and the culture of the organization.
Kotz, in his analysis of the 2004 investigation, wrote that the February 2004 call to Madoff was made by "the examination team," a four-person unit in the SEC's Office of Compliance Inspections and Examinations, or OCIE. It doesn't mention Walker-Lightfoot's absence.
The report also discusses a call with Madoff on March 18, 2004. Kotz wrote that "it appears that" Walker-Lightfoot, Mark Donohue and two other team members were on the call. But Walker-Lightfoot says she doesn't recall being on the call. She told Dow Jones Newswires that she would have asked Madoff nine follow-up questions about his operation that she suggested to Donohue in an email on March 10, 2004.
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