WSJ Knew About Madoff Failed to Investigate

Not only did Chris Cox, head of the SEC, ignore Madoff, so did the Wall Street Journal, according to Harry Markopolos.
This comes from Gary Weiss, an editor at Conde Nast.

Markpolos says as follows:

[Pat Burns, communications director at Taxpayers Against Fraud] put me in contact with John Wilke, senior investigative reporter for the Wall Street Journal's Washington bureau. Mr. Wilke and I would become friends over the next three years. Unfortunately, as eager as Mr. Wilke was to investigate the Madoff story, it appears that the Wall Street Journal's editors never gave him approval to start investigating. As you will see from my extensive e-mail correspondence with him over the next several months, there were several points in time in which he was getting ready to book air travel to start the story and then would get called off at the last minute. I never determined if the senior editors at the Wall Street Journal failed to authorize this investigation.
According to his timeline, he contacted the Journal in December 2005. The emails to which he alludes can be found here.

Isn't that something. Did the Wall Street Journal help protect the greedy? Read it all here.
Markopolos offered to go undercover:

Complete list of those ripped off by Madoff.

SEC Ignored Madoff Warnings

NYT: A former investment manager is prepared to tell a House hearing on Wednesday that the Securities and Exchange Commission ignored his repeated warnings about the dealings of the disgraced financier Bernard L. Madoff.

The manager, Harry Markopolos, asserts that he submitted warnings about Mr. Madoff since 2000 and he assails the agency for ignoring his warnings or brushing them aside. “Nothing was done,” he declares, in what Dow Jones Newswires and Fox Business report is his prepared testimony.

“There was an abject failure by the regulatory agencies we entrust as our watchdog,” Mr. Markopolos says in his testimony. Mr. Madoff was arrested in December and accused of running a $50 billion Ponzi scheme.

Mr. Markopolos says his experience with most S.E.C. officials “proved to be a sytemic disappointment, and lead me to conclude that the S.E.C. securities lawyers, if only through their investigative ineptitude and financial illiteracy, colluded to maintain large frauds such as the one to which Madoff later confessed.”

Here is Markopolos' testimony. It looks like there is a lot of email evidence.

Goodbye Chris Cox Hello Mary Schapiro

With the ease at which Ponzi extraordinaire Bernie Madoff bilked billions of dollars out of people, it seems that John McCain was right when he suggested Chris Cox, head of the Securities and Exchange Commission, be fired. Cox seems confused.
Some praise for Cox and a look at the problems at the SEC. 

Obama's apparently replacing him with Mary Schapiro, who would be the first woman to head the SEC.
Here is her bio at Forbes:

Ms. Schapiro serves as CEO of the Financial Industry Regulatory Authority, created in 2007 through the consolidation of the National Association of Securities Dealers ("NASD") and the member regulation, enforcement and arbitration functions of the NYSE. She previously served as Chairman and CEO of the NASD, as Chairman of the Commodity Futures Trading Commission and as a Commissioner on the Securities and Exchange Commission. She is currently a director of Kraft Foods Inc.

Schapiro is no stranger to rebuilding:

WaPo: Since arriving at the broker-dealer group NASD in 1996 on the heels of a price-fixing scandal, Schapiro has rebuilt the group's enforcement division into a legitimate regulatory watchdog. On her watch, the NASD expelled crooked brokers, helped clean up biased investment banking research and cracked down on mutual fund sales abuses.

An October interview with Schapiro:

Wall Street Journal Slams McCain

WSJ: "The chairman of the SEC serves at the appointment of the President and has betrayed the public's trust. If I were President today, I would fire him."

Wow. "Betrayed the public's trust." Was Mr. Cox dishonest? No. He merely changed some minor rules, and didn't change others, on short-selling. String him up! Mr. McCain clearly wants to distance himself from the Bush Administration. But this assault on Mr. Cox is both false and deeply unfair. It's also un-Presidential.

Take "naked" shorting, in which an investor sells a stock short -- betting that it will fall in price -- without first borrowing the shares he is selling from an investor who owns them. The SEC has never condoned the practice, and since 2005 it has clamped down on short selling in any stock that shows evidence of naked shorting. The SEC further tightened its rules against naked shorting just hours before Mr. McCain excoriated Mr. Cox for doing nothing. read the rest. It give McCain a pretty good hammering.