Madoff Ponzi Scheme Means Securities Fraud Changes for SEC

Although Bernard Madoff didn’t invent the Ponzi scheme, he did bring the term “Ponzi scheme” back into the spotlight for millions in the US. The depth and breadth of the Madoff scheme also changed how the US Securities and Exchange Commission (SEC) handles these types of complaints. Let’s take a look at how enforcement has changed in a post-Madoff scheme world.

According to the SEC, it will now:

  • Change the way complaints are handled. The SEC plans to revamp its system for handling the massive number of complaints and tips it receives each year. The SEC has now updated its procedures and is planning a new centralized system that will help track and analyze the complaints it receives. The SEC also created an Office of Market Intelligence to help bring complaints and information to the same place for more effective investigation.

  • Work on Insider cooperation. The SEC will now put formal agreements in place with insiders who can offer evidence, which would mean that person could see a reduction in sanctions, and the investigation into potential securities fraud could get started earlier.

  • Keep investors safer. The SEC put rules in place to help protect investors from fraud, including additional exams and reviews for financial advisors.

In addition to these changes, the SEC is also putting in place wide-reaching improvements to their own internal controls, training requirements, recruitment activities, and resources.

The SEC hopes that the results of these new rules and policy changes will mean:

  • More efficient investigations into securities fraud
  • Stronger cases against the people or entities responsible for investment fraud
  • That US investors are better protected

The FINRA lawyers with Meyer Wilson represent investors all over the US who have lost money to stockbroker misconduct, stock scams, and any form of investment fraud in mediation, arbitration, and litigation proceedings. Give us a call to schedule a completely free, no-pressure consultation to talk about how you may be able to recover your investment losses.