Staffer at SEC Warned of Madoff's Shady Dealings - NBC 6 South Florida

Staffer at SEC Warned of Madoff's Shady Dealings

Investigator taken off case once she raised red flag

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    Staffer at SEC Warned of Madoff's Shady Dealings
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    A lawyer for the SEC found inconsistencies in Bernie Madoff's paperwork in 2004 and asked to send his firm a series of follow-up questions but was waved off the case by her supervisors.

    A staffer at the Security and Exchange Commission who could have exposed Bernie Madoff's massive Ponzi scheme was waved off the case after she sounded the alarm, according to a report.

    Genevievette Walker-Lightfoot, a lawyer for the SEC, found inconsistencies in Bernie Madoff's paperwork in 2004 and asked her boss to send his firm a series of follow-up questions but was waved off the case by her supervisors, one of whom later married the convicted Ponzi schemer's niece, the Washington Post reported.

    The follow-up probe, a series of nine questions, would have likely shown light on Madoff's shady dealings and exposed the massive fraud that left many in financial ruin and had been bubbling beneath the surface undetected for years, according to the paper.

    Walker-Lightfoot was assigned to pore over reams of Madoff's paperwork and found inconsistencies in his trading patterns.  After she raised her initial concern, she was never again consulted on Madoff's case.

    Madoff was sentenced to 150 years in prison earlier this week after admitting in December to masterminding a massive Ponzi scheme that bilked investors out of $65 billion.

    The SEC investigated Madoff's business at least five times over a two-decade span but the fraud went undetected.

    A month after Walker-Lightfoot raised concerns, her boss said she should focus on a different investigation into mutual funds, documents show.

    She e-mailed her supervisor saying she was "not sure what you want ... (me) to do concerning Madoff, but I'm continuing on the mutual fund project, as requested. Should we just focus on mutual funds and return to Madoff when we're done?"

    "Concentrate on mutual funds for the time being," her boss replied.