Cox admits SEC failure to detect Madoff fraud

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WASHINGTON, DC - Christopher Cox, chairman of the US Securities and Exchange Commission (SEC), has admitted to failures by SEC staff to follow up on warnings of wrongdoing at Bernard Madoff's hedge fund. Following an initial review into the Madoff case, Cox revealed the SEC had received "credible and specific" allegations of financial wrongdoing against the Wall Street broker as long ago as 1999.

"I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them," says Cox.

The supervisor has announced it will launch an internal inquiry, led by SEC inspector-general David Kotz, into the past allegations against Madoff and his investment company, and why they were not judged credible enough to merit further examination at the time.

Madoff is charged with running a $50 billion fraud in one of the biggest cases in Wall Street history.

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