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>Garrett Calls On GAO to Investigate SIPC, the Trustee and SEC’s Actions in Madoff Case

>Garrett Calls On GAO to Investigate SIPC, the Trustee and SEC’s Actions in Madoff Case 

WASHINGTON, June 3, 2011 –

Rep. Scott Garrett (R-NJ), Chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, today called on the Government Accountability Office (GAO) to conduct a comprehensive evaluation of the actions of the Securities Investor Protection Corporation (SIPC), the Trustee in the liquidation of Bernard L. Madoff Investment Securities, LLC (BLMIS), and the Securities and Exchange Commission’s (SEC) involvement and oversight of this major liquidation. 

“The SIPC Trustee in the Madoff case has been pursuing policies that are in direct conflict with the goals of protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation.  These goals, of course, are the central mission of the SEC, which supposedly supervises SIPC, but has been asleep at the switch. 
“The Trustee’s actions are also inconsistent with SIPA, which is why we introduced H.R. 757, the Equitable Treatment of Investors Act – to ensure the law is followed as it was intended to be.

“The SEC Inspector General has raised questions concerning the SEC’s oversight of trustee and attorney’s fees in the Madoff liquidation.  There are also major concerns regarding the Trustee’s actions in regards to fairness to defrauded innocent investors as well as their impact on the U.S. taxpayer.  Since the SEC has informed its Inspector General that a near-term inspection of SIPC is unlikely, we, on a bipartisan basis, have turned to the GAO to undertake a comprehensive evaluation.”

Garrett was joined in his request by Chairman Peter King (R-NY), Chairwoman Ileana Ros-Lehtinen (R-FL), and Representative Carolyn McCarthy (D-NY), all of whom are cosponsors of H.R. 757, the Equitable Treatment of Investors Act.  Correspondence between the Subcommittee and SIPC, which is referenced in the GAO letter, are attached. 

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