It seems that everyone is connected to the Madoffs in one way or another. Mary Shapiro, President-elect Barack Obama’s choice to head the SEC once appointed one of Bernie’s sons to a regulatory group that oversees American securities firms.
It has emerged that in 2001, Ms Schapiro, currently chief executive of the Financial Industry Regulatory Authority (Finra), employed Mark Madoff to serve on the board of the National Adjudicatory Council — the division that reviews disciplinary decisions made by Finra.
Madoff has two sons that have denied part in the Ponzi Palooza.
Both sons have emphatically denied any involvement in what could be the biggest fraud perpetrated by an individual.
An individual? Oh, please. Does anyone really believe that Bernard Madoff pulled the Ponzi all by himself?
So, what does this mean for Ms. Shapiro? I suspect that she will come under heavy scrutiny when she appears before Congress for her confirmation hearing.
However, the link with Mark Madoff may prove controversial for Ms Schapiro and the President-elect, who has moved fast to replace Christopher Cox, the current head of the SEC. The watchdog has came under fire for failing to detect Mr Madoff’s activities.
Earlier this week, Mr Cox admitted the regulator had repeatedly failed to follow up on tip-offs about Mr Madoff’s business dealings.
At the time of Mark Madoff’s appointment, Ms Schapiro was serving as president of the National Association of Securities Dealers (NASD), according to the Wall Street Journal, which was consolidated with the New York Stock Exchange Member Regulation in 2007 to form Finra.
Before we tar and feather Mary Shapiro for knowing Mark Madoff and appointing him to a regulatory body, we should give her a chance to speak her piece. After all Ms. Shapiro has an impressive string of accomplishments.
She has served as a commissioner of the SEC under three administrations since the 1980s: President Reagan appointed her in 1988, she returned for the first President Bush in 1989, and she was named acting chairman by President Clinton in 1993.
Ms Schapiro chaired the Commodities Future Trading Commission in the mid-1990s, during the downfall of Barings Bank, and first joined NASD in 1996 as president of regulation.
Impressive, huh? But, let us not forget that good ol’ Bernie came with an impressive resume, too.