The New York Post has an article on Meaghan Cheung, one of the investigators at the SEC who reviewed Bernard Maddoff’s investment group after being tipped off by Harry Markopolos. While I certainly sympathize with anyone under the spotlight of today’s generally less than well informed mass media, her response quickly dispelled some of my good intentions,
“Why are you taking a mid-level staff person and making me responsible for the failure of the American economy?”
Umm, where to start? Perhaps those that are out looking for some accountability are not coming to you with questions about the economy in general, but more to just the small part of the economy that was under your review. The two seem (almost) unrelated. This quote further in the article sheds a little more light on that response,
“I had no incentive to give anyone a pass. I had an incentive to bring cases that should be brought, especially big cases,” she said. “I was not influenced, and I don’t believe anyone in the New York office was influenced, by any other desire than to find out the truth. . . There is no other reason to work there for so long, except that I love what I do.” She added, “No one in my office had any incentive to miss something like this.”
My sympathies waned. Just because you had no incentive to cheat/bend rules/give favors, does not mean you did a good job. Nor are the factors that caused the general stumbling of the economy responsible for how you did your job.
(Speaking here only in the context of the the review of Maddoff’s investment group. Obviously Maddoff is the one who bears the ultimate responsibility for the fraud.)
So how does one go about fixing this.
“Cheung, branch chief in New York, actually investigated [Markopolos’ claims] but with no result that I am aware of. In my conversations with her, I did not believe that she had the derivatives or mathematical background to understand the violation,” Markopolos [who originally brought the issue to light] wrote.
As for Markopolos’ reference to her supposed lack of mathematical acumen, Cheung said, “Investigations are conducted by lawyers and examiners and investigators. We have experts available to help us.”
Perhaps having mathematicians/experts/investment professionals do the investigating, with lawyers helping would be a better idea. Assuming lawyers can do everything in any field is probably not the best approach.