Rep. Scott Garrett, R. N.J., chairman of a House subcommittee, is calling on the Government Accountability Office (GAO) to conduct a “comprehensive evaluation” of the Securities Investor Protection Corp. (SIPC) Trustee Irving Picard’s handling of the liquidation of Bernard L. Madoff Investment Securities as well as the Securities and Exchange Commission’s (SEC) “involvement and oversight” of the matter.
Garrett (left), who heads the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, told the GAO in a June 3 letter that Picard, the SIPC Trustee in the Madoff case, “has been pursuing policies that are in direct conflict with the goals of protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation.” These goals, he said, “are the central mission of the SEC, which supposedly supervises SIPC, but has been asleep at the switch.”
The SIPC Trustee’s actions, Garrett continued, are also inconsistent with the Securities Investors Protection Act (SIPA), which is why the Capital Markets Subcommittee re-introduced in February H.R. 757, the Equitable Treatment of Investors Act, “to ensure the law is followed as it was intended to be.”
Garrett was joined in his GAO request by subcommittee members Rep. Peter King, R-N.Y.; Rep. Ileana Ros-Lehtinen, R-Fla.; and Rep. Carolyn McCarthy, D-N.Y. Garrett went on to say that he and his colleagues on the subcommittee turned to the GAO on a bipartisan basis because the “SEC has informed its Inspector General that a near-term inspection of SIPC is unlikely.”