Over the weekend, I did a blog entry looking at whether Bernard Madoff's victims could sue the Securities and Exchange Commission for its negligence.
Certainly, Madoff himself expressed surprised that the SEC had failed to apprehend him. He was in a state of shock that he was being allowed to get away with it. But he was such a psychopath that he just kept going, stealing other people's money.
Now we have a report which might give ammunition for those thinking of suing the SEC. According to Bloomberg, family members of an SEC official got a tip back in 2005 that Madoff was running a Ponzi scheme. But instead of doing anything about it, they tipped in $2 million to make money off the scam.
If that allegation is right, it makes the sense that the SEC turned a blind eye. Even more alarmingly, it suggests there was some collusion with Madoff. And that is fodder for the lawyers.
no comment untill now