Thursday, October 15, 2009

Couple Sues SEC for $2.4 Million in Madoff Losses

Posted by Plus Master at 9:10 AM
 

Two investors who lost more than $2.4 million investing with failed financier Bernard Madoff sued the U.S. Securities and Exchange Commission Wednesday, blaming the agency for failing to detect the epic multi-decade fraud that involved tens of billions of dollars.

Investors Phyllis Molchatsky, a disabled retiree, and Dr. Steven Schneider, filed the lawsuit in U.S. District Court in Manhattan.

The lawsuit said the SEC had ''countless opportunities to stop the Ponzi scheme Madoff operated over 16 years, and botched all of them.'' The lawsuit said the SEC directly caused the investors to lose their investment.

SEC spokesman John Heine said Wednesday that the SEC would contest the lawsuit.

''Based on our initial understanding of the matter, we believe there is no merit to the complaint,'' he said.

Attorney Howard R. Elisofon, representing Molchatsky and Schneider, said the lawsuit was the first lawsuit filed on behalf of Madoff investors against the SEC.

''Instead of watching the backs of Ms. Molchatsky and Dr. Schneider and the backs of the other investors, the SEC -- through its negligence -- was effectively watching Bernie Madoff's back,'' Elisofon said in a statement. ''Now it is time for the SEC to be held accountable and for the federal government to do what the law says it must do: compensate the victims for its negligence.''

The SEC has faced heavy criticism for not discovering the multibillion-dollar fraud since it was revealed last December, when Madoff was arrested after confessing the fraud to his sons. He is serving a 150-year prison sentence after pleading guilty to fraud charges.

Read the full story here on the New York Times website.
POSTED IN Errors & Omissions (Non-Medical)

2 Responses to "Couple Sues SEC for $2.4 Million in Madoff Losses"

PLUS Jeorge Says: October 21, 2009 (5:10AM) SEC is a regulatory body which is suppose to supervise and monitor some government agency whether they are abiding under certain guiding principle. However this regulatory body SEC had been sued in relation to the Madoff fraud. The law doesn’t exempt whether it is a government agency or not as long as there is an evident violation of law they can be sued for their negligence. I have heard a lot of investors filing case against with regard to this issue. I just wish those who are liable for this must be penalized in order to give justice for the victim of this fraud. If I were a victim I will secure for an installment loans to secure for a best legal counsel that will penalize those who are accountable in this issue.
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