SEC’s failure to track Madoff fraud under investigation of the US Congress

Rep. Edolphus Towns, chairman of the House Oversight and Government Reform Committee, made a statement on Thursday that the US Congress will convene hearings on the failure of the Securities and Exchange Commission to follow clues that could have uncovered Bernard Madoff's $65 billion Ponzi scheme.

"These repeated failures raise serious questions about SEC's internal culture and monitoring, the possibility of regulatory capture and the wisdom of the self-correcting market paradigm," Towns said in a letter dated Thursday.

On September 10 the Senate Banking Committee plans a hearing that will examine the SEC inspector general report, which found key SEC personnel assigned to the Madoff case were at times too inexperienced and resisted whistleblowers.

SEC chairman Mary Schapiro was asked by Towns about staffing qualifications, and whether a 2002 effort by Congress to reverse turnover and experience problems at the agency has had any impact. He asked about the role of senior managers in overseeing cases and which officials were involved with the Madoff matter.