Wednesday, October 14, 2009

Can Madoff's victims sue the SEC?

Two of them are trying--Couple sues SEC for $2.4M in Madoff losses reports Crain's New York Business.

Obviously, the SEC screwed up big time--even they admit that. Just as obviously, I don't believe that there is a cause of action here, unless the government consents to the lawsuit, which they won't. This sort of problem will also come up from the management of the car companies, now that the government is the majority owner.

Remind me please, why do we want the government to run health care also?
Posted by Jim Gust at 4:00 PM

2 comments:

JLM said...

On NBR Paul Kangas predicted the SEC would be hit with "a flood" of similar suits.

Does the SEC's failing bode ill for the federal government's ability to regulate health care, including Medicare? Probably. My worry is that the proposed new consumer protection agency might safeguard consumers as vigilantly as the SEC safeguards investors.

9:26 AM
Jim Gust said...

I doubt government "incompetence" gives anyone the right to sue. I don't think "negligence" is enough either.

To sustain the suit, I think the plaintiffs need to prove that someone in the SEC took bribes from Madoff, and that SEC should have discovered that through its internal supervision.

9:50 AM

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