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US regulator defends oversight, as scandal claims life of investor
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US regulator defends oversight, as scandal claims life of investor
AFP - Thursday, December 25
WASHINGTON (AFP) - - Wall Street's top regulator defended his agency's handling of the US finance crisis Wednesday, denying that a culture of lax oversight allowed the Bernard Madoff scandal to go undetected.
In his first remarks since the Madoff scandal first came to light, Securities and Exchange Commission chairman Christopher Cox told the Washington Post in an interview he was not responsible that the agency failed to detect the alleged fraud but acknowledged that the case was "troubling."
His published remarks come one day after French investment manager Thierry de la Villehuchet, 65, who plowed 1.5 billion euros (2.1 billion dollars) into Madoff's fraudulent scheme was found dead in his New York office, in what a friend says was a suicide. An autopsy was to be performed Wednesday.
Cox said that the SEC remains a muscular regulatory force, calling the agency "a strong market cop on the beat."
Asked whether he should be blamed for a culture of lax enforcement that allowed the Madoff fraud to go undetected, he said: "Absolutely not. In fact, it's in the DNA here that people thrive on bringing big cases."
However he called the Madoff case "a big asterisk" in what he considers his agency's otherwise commendable record.
"The case is very troubling for that reason. It's what the SEC's good at. And it's inexplicable."
Prosecutors say that former Wall Street baron Bernard Madoff confessed to losing upwards of 50 billion dollars over years of running a pyramid scheme, where new investors were secretly fleeced to pay returns to earlier investors.
The 70-year-old Madoff, former chairman of the Nasdaq stock market and a mainstay of the powerful American Jewish community, is currently free on bail of 10 million dollars as police continue their probe.
His friend Villehuchet, co-founder and chief executive of Access International which invested funds for European high society, was found dead shortly after 7:00 am (1200 GMT) Tuesday by a security officer in the building that housed his investment concern, the New York police department said.
Villehuchet, both an investor in and apparent victim of Madoff's elaborate investment scheme could not cope with the pressure following the outbreak of the scandal," one of Villehuchet's close friends told AFP in Paris, speaking on condition of anonymity.
The source said Villehuchet was "devastated" and feared his clients would turn against him in the courts, after watching much of the two billion euros (2.79 billion dollars) he managed for European clients evaporate.
Cox meanwhile also rejected criticism that the agency's alleged laissez-faire approach to oversight contributed to the unraveling of global finance markets.
"What we have done in this current turmoil is stay calm, which has been our greatest contribution -- not being impulsive, not changing the rules willy-nilly, but going through a very professional and orderly process that takes into account unintended consequences and gives ample notice to market participants," he said.
The finance scandal continued to reverberate throughout much of the globe.
After Angela Merkel's government unveiled a package of measures in October to boost growth, extra measures by the German government to stop Europe's biggest economy slipping into its worst postwar recession were expected next month, but on a considerably smaller scale than some had hoped, newspapers reported on Wednesday.
Russia announced it would run a budget deficit in 2009 for the first time for a decade, a Kremlin economic aide was quoted as saying by RIA Novosti news agency on Wednesday.
Meanwhile, Beijing's top economic planner warned Wednesday that the global economic crisis would pose great challenges for China, and urged the government to finetune its large-scale stimulus plan.
"We are confronted with great challenges resulting from a dramatic change in the world economic and financial situation," Zhang Ping, head of the National Development and Reform Commission, China's planning agency, told the country's parliament.
China's economic growth slowed to 9.0 percent in the third quarter of this year as global financial woes started taking a toll, prompting the government to announce a 586-billion-dollar stimulus package to pump up domestic consumption.
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Bernard L Madoff walks down Lexington Ave to his apartment December 17, in New York City. Wall Street's top regulator defended his agency's handling of the US finance crisis Wednesday, denying that a culture of lax oversight allowed the Bernard Madoff scandal to go undetected.
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