Madoff Whistleblower Blasts SEC

Fraud investigator Harry Markopolos blamed the Securities and Exchange Commission's "financial illiteracy" for failing to heed his warnings about money manager Bernard Madoff.

Mr. Markopolos had warned the SEC for nearly a decade that Mr. Madoff was operating a Ponzi scheme. Mr. Markopolos is set to testify before a House committee Wednesday, and 311 pages of his written testimony became public Tuesday evening.

In the documents, Mr. Markopolos described his efforts like a military intelligence operation. He said he and his team of investigators collected "intelligence reports" from field operatives and developed networks of contacts to provide information on Mr. Madoff's operation and the feeder funds that brought investors to the Madoff money-management business.

Markopolos Blasts SEC for 'Financial Illiteracy'

Text of Markopolos testimony

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Questions for Mr. Geithner, President Obama’s nominee for Treasury Secretary

I found this article in the Wall Street Journal very entertaining. My first question would be, who did your tax return? Update: He answered this at the hearing. He used Turbo Tax.

The American tax code is so complex that even Treasury secretary nominees can easily make mistakes on their returns. Furthermore, while income tax rates are 10 percent to 35 percent for individuals and 35 percent for corporations, because of the proliferation of deductions, credits, exclusions and loopholes, the revenue from income tax amounts to only 10 percent of gross domestic product. Should you give priority to simplifying the code and enforcing compliance before raising rates?
— CHARLES O. ROSSOTTI, the commissioner of internal revenue from 1997 to 2002

The Treasury and Federal Reserve have been selecting which companies in American industry and finance will get taxpayer money. What criteria do you use to decide?
— ANNA JACOBSON SCHWARTZ, an economist at the National Bureau of Economic Research and the author, with Milton Friedman, of “A Monetary History of the United States, 1867 to 1960”

President Obama supports the estate tax. Why should a person who leaves his money to his children pay more in taxes than another person with the same lifetime income who spends all his money on himself?
— N. GREGORY MANKIW, a professor of economics at Harvard

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Questions for Mr. Geithner

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