Regulators' effectiveness queried:Serious doubt have been cast on the effectiveness of American financial regulation after two major failures - the Sir Allen Stanford and the Bernard Madoff scandals.
Serious doubt have been cast on the effectiveness of American financial regulation after two major failures - the Sir Allen Stanford and the Bernard Madoff scandals.
As more details emerge of the alleged $50bn Madoff fraud, the colossal scale of that failure has become starkly clear.
The US financial regulator, the Securities and Exchange Commission, was given repeated tip-offs that fraud was underway at hedge funds run by Bernard Madoff, but the claims were dismissed.
“The SEC needs a better system of tracking complaints”
Harvey Pitt, former SEC chairman
A US Congressional committee heard from Harry Markopolos, a former investment officer who sent tip-offs and had spent years investigating the Madoff empire.
He and colleagues Frank Casey and Neil Chello first spotted inconsistencies in Madoff's figures in the 1990s, when they worked at a company which advised on hedge funds.
The BBC's Lesley Curwen spoke to Neil Chello, who now works for the Benchmark Plus investment firm in Washington State, and asked what had first struck him about the Madoff hedge funds.
The US Congress and the Securities and Exchange Commission's inspector general are investigating what caused the regulatory failure, and why SEC inspections of Madoff's business failed to detect the alleged fraud.
Bank customers in Antigua outside a Stanford Group owned Bank of Antugua branch
The SEC's enforcement director resigned less than a week after she received a grilling in front of Congress over the Madoff affair.
The new SEC chairman, Mary Schapiro, has announced various measures meant to strengthen enforcement. But how deep-seated is the malaise at the SEC?
Harvey Pitt was chairman of the SEC between 2001 and 2003. Business Daily asked him why he thought the organisation failed to respond to the Madoff tip-offs.
What's it like stepping over the line from being a respectable businessman, into fraud and criminality?
“I liked the way people treated me, as I bought nicer houses and bigger cars”
Patrick Kuhse, convicted fraudster
Former US stockbroker Patrick Kuhse knows. In the 1990s he was convicted of conspiracy, money-laundering and bribing a public official in the state of Oklahoma.
He then went on the run in Costa Rica with his family, but finally turned himself in and spent four years in jail.
Nowadays, he's an ethical business consultant. Lesley Curwen asked him about the moment that he crossed the line into fraud.
Listen Listen to Patrick Kuhse (4 mins 29 secs)
First broadcast on Business Daily on 6 March 2009