By Edith Orenstein, FEI Financial Reporting Blog -
The stunning fraud allegedly confessed last week by investment advisor Bernard L. Madoff, resulting in up to $50 billion of losses by his own estimate, has investors reeling and questions being asked about the role of regulators and auditors. SEC's Dec. 11 press release, SEC Charges Bernard L. Madoff for Multi-Billion Dollar Ponzi Scheme notes:
“According to regulatory filings, the Madoff firm had more than $17 billion in assets under management as of the beginning of 2008. It appears that virtually all assets of the advisory business are missing.”
The scale of the alleged fraud, according to Madoff’s own confession to at least one of his senior employees (said in various reports to be his sons) indicates he may have made off with $50 billion.
“Madoff told these employees that he was "finished," that he had "absolutely nothing," that "it's all just one big lie," and that it was "basically, a giant Ponzi scheme," as cited by the SEC.
Read more about the scandal, and the audit firm associated with Madoff's company, here.