A humbled US Securities and Exchange Commission was warned on Thursday that it must “reform itself from within” or Congress will do it for the agency which bungled several opportunities to stop Bernard Madoff’s ”Ponzi” scheme.

 

Richard Shelby, the Alabama senator, questioned the agency’s contention that it will need more resources to patch the flaws that allowed Mr Madoff’s to go on for 16 years despite numerous tips and investigations.

 

“The Commission is going to need to make a broad-based change,” Mr Shelby said at a US Senate Banking Committee hearing about improving the SEC’s performance.

The warning came after a 477-page report last week by David Kotz, the agency’s internal watchdog, described how SEC officials could have uncovered Mr Madoff’s fraud at almost any time but was hindered by “systematic breakdowns”. The US Senate Banking Committee is helping to shape the future role of the SEC amid a broader revamp of financial regulation.

 

Source: FT.com by Alan Rappeport in New York—SEC faces reform ultimatum

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