SEC Sued For Negligence Over Madoff Swindle

While panicked investors caught up Bernard Madoff's $50 billion Ponzi scheme scramble to recover their money from the disgraced executive, one woman is going a different route: going after the SEC:

A New York woman who lost nearly $2 million investing with Bernard Madoff has filed a claim against the Securities and Exchange Commission alleging the agency was negligent in failing to detect an alleged decades-long fraud.

The administrative claim for relief was filed with the SEC on Monday and is believed to be the first attempt by an investor to recover lost money from regulators. Phyllis Molchatsky, a 61-year-old retiree from Valley Cottage, N.Y., is seeking $1.7 million in damages from the agency.

The woman, it would seem, is on solid ground, considering that some SEC employees were watching porn and running their own private businesses when they should have been noticing the multiple signs, like Madoff's use of a tiny, obscure accounting firm and his impossibly constant rates of return, that Madoff was fleecing people around the world.

Comments

[harry9876]

by the way, there's a report this morning that last year, last summer to be precise as the first of ben's taxpayer subsidized bailouts were handed to the banks.....­.a JPM comex trader apparently went into the gold market and "fireballed" the gold price to take it down hard.....u­sing something like 15B of futures it is said...... yes, they felt free it appears to use the money to nuke the metals, the one sector of the market showing how badly damaged the dollar is......

yes, the markets are melting down, and they move to nail the escape hatch shut on people by destroying the one ultimate safe haven .....yup. and they do it with our money. great. just peachy. thanks ben.

[harry9876]

hi....the gold world has tried this for years, attempting to sue for manipulation of the markets by several large institutions. there are trading records, warehouses of evidence. and what's the result? stonewalling by the CTFC and the courts. i wish this woman all the luck in the world, but if what has gone on in the silver and gold markets >>>> with tidal waves of complaints, letters and emails from investors to the CTFC and SEC >>>>> this woman hasn't got a chance.

they knew about madoff. they permitted the fraud. they know all about what goes on in the silver and gold markets...­....and nothing is done.

our government, our regulators are not our friends. they are just another tool of the insitutions and the government.

[mjtaylor22]

HEY THIS IS THE ERA OF SMALL GOVERNMENT AND DEREGULATION,
SEE WHAT SMALL GOVT GETS YA, INCOMPETENCE, AND COMPLICITY.
WHY IS BNO ONE GOING TO JAIL, WHY WERE THERE NO INVESTIGATIONS UNTIL NOW.
HE HAD TO ADMIT THIS FRUAD AND IS STILL OOUT WALIKNG AROUND
WHAT HAPPENED TO AMERICA OR RATHER THE BEST OF AMERICA

[jeffp26]

Dig this if you really want to be irritated:

Ira Lee Sorkin, who is now getting paid to represent Madoff, was the head of the NY Regional Office of the SEC -- the very office that should have been all over Madoff's crimes -- from 9184 - 1986.

So Sorkin was responsible for catching criminals like Madoff in the NY region, during a period of time in which Madoff was defrauding investors. But Sorkin did not catch him. (Perhaps because Sorkin is a member of the club?)

Now Sorkin will bill millions of dollars of fees, allegedly defending the very lowlife criminal he failed to catch when he worked for the SEC.

Is this a great country or what?

[andj]

Can I sue for having made bad investments, and having money invested in dollars?

[KCFreedom]

Good luck. All they have to do is say "they don't remember", just like all the guilty do.

I'm sure all the pertinent documents are, or will be shredded. Or, perhaps they were in WTC7 just like all the FBI files of the Wall St. investigation and the Prescott Bush court case files.

[LHoney]

Can you really sue a government agency?? Let the games begin!

[chappelforpres]

Of course those unwavering, above market returns, didn't appear a red flag to the Phyllis Molchatsky's of the world either - as long as those glorious checks flowed.

It's not my fault! Madoff cheated me. I'm just a poor, unfortunate victim. I deserve to be saved.

This guys trash and he deserves a lifetime behind bars, but his "investors" get no magic wand from the US taxpayer..­.

[mjtaylor22]

UNFORTUNATELY THEY NEED TO SUE HIM PERSONALLY, BUT SINCE HIS ASSETS HAVE NOT BEEN FROZEN, HE IS PROBABLY HIDIGNTHEM UNDER TRUSTS ETC ETC.
THANSK BUSH AND THE RNC FOR NOT WATCHING OUT FOR ANY US CITIZEN ON ANY LEVEL, RICH OR POOR, SEE THOSE CHARITABLE FOUNDATIONS HE ROBBED, AT A TIME WHEN MILLIONS OF PEOPEL WERE THROWN INTO THE STREET WITH NO JOB AND NO HOME.

[disgusted48]

is some agency trying to find whats left of the money?

[doggoneit2008]

ANGLO SAXON CAPITALISM HAS FAILED ..NOW WHAT ?

[wm1066]

The only way this works for me is if the PEOPLE at the SEC are the ones who have to pay for this and no tax payer money is used in their defence. Let Cox have to pony up the money, after all he was in charge at the time.

[flatus]

How about if just the Republican half pony up for supporting this intentional lack of vigilance?

[willfarnaby]

M I S S I O N
A C C O M P L I S H E D

[unscum]

There you go, looks like we all will be picking up the tab for this debacle. God always smiles on bankers, fund managers and their rich clientele.

[ECBurton]

Isn't our social security system a Huge Ponzi Scheme?By our own goverment.­We have been told for years it won't be there for when we old .

[TJCole]

That's mostly due to Reagan, he was it's Bernie Madoff....­.

[Chicago jo]

now we have to pay to defend the SEC and if she wins we have to pay her damages. Ms Phyllis Molchatsky­...at long last? Have you left no sense of decency? Your returns were well above the market and in a very risky investment and now we have to pay for your mistake? ...again I have to ask, have you no sense of decency?

[voltage356]

Not only that, but what about all the other investors lining up to sue the SEC. Don't you just love America!

[voltage356]

Chris Cox should pay out of his own pocket for this mess.