Reuters Investigates

Insight and investigations from our expert reporters

Can the SEC learn from its mistakes?

-

All too often, the U.S. Securities and Exchange Commission gives its critics plenty of ammunition to complain about.

The SEC’s spectacular failure to detect the massive Ponzi scheme being run by Bernie Madoff is only the most high-profile miss by the agency. Over the years, the nation’s top securities cops have been slow to police abusive trading by hedge funds and spread of complex structured products–including subprime ones–churned out by Wall Street banks.

But it appears when it comes to handling tips and complaints from the public, the SEC may be learning from its mistakes and getting its act together. A new computerized database for processing tips  about corporate and securities fraud is winning praise from some of the SEC’s most vocal critics. The SEC’s new approach is even making a believer out of Madoff tipster Harry Markopolos.

For more on the SEC’s new database and its closer partnership with the SEC read our story here.

The Silence of the Madoffs

-

The FBI profiling group made famous in the movie The Silence of the Lambs is turning its attention to white collar criminals. It’s not that the FBI has grown bored with serial killers, it is more an indication of the growth industry white collar crime seems to have become.

The financial crisis not only was the undoing of Bernie Madoff’s long-running Ponzi scheme, it also brought down Allen Stanford’s empire and exposed dozens of other apparent investment schemes. And, lately, it appears federal authorities in New York keep finding another hedge fund trader who made money from illegal stock tips.

Steve Cohen and the law of big numbers

Photo
-

By Matthew Goldstein

All too often the bigger an investment fund gets, the more difficult it is to continue to generate blowout returns.

Maybe the best example of a fund getting so popular and ultimately unwieldy is Fidelity’s Magellan fund.  One has to wonder if on a smaller scale, the same phenomena is happening to Steven Cohen’s SAC Capital Advisors.