Senate Banking Committee Chairman Christopher Dodd said government regulators need to pay more attention to potential fraud by fund managers, according to MarketWatch.
“Seems to me we need to go back and revisit the whole model for examining fund managers,” he said after a hearing that examined the Security and Exchange Commission’s failure to stop Bernard Madoff’s alleged $50 billion Ponzi scheme.
Last week, Sen. Richard Shelby, R-Ala., introduced legislations that would allocate $20 million to hire new enforcement officials at the SEC.
“You need additional personnel to deal with the complexity of the markets, which has increased over the past decade. I would hope that continuing education is incorporated,” said Sen. Mark Warner, D-Va.
Sen. Robert Menendez, D-N.J. expressed concern that after failing to recognize warning signs in the Madoff case, the SEC would be unable to catch problems in the future. Enforcement director for the SEC, Linda Thomsen, voiced similar fears.
“I have enormous concern that we have so much information that we don’t have the right ways to mine it,” said SEC enforcement director Linda Thomsen. “We could get a long complaint that includes all kinds of info and it’s all wrong; we can get a short complaint that sounds off but it could be dead on.”