WASHINGTON (Reuters) - Bernard Madoff, who ran the biggest investment fraud in history, has partially settled a U.S. Securities and Exchange Commission civil complaint against him without having to admit any wrongdoing.
Tuesday’s announcement left some legal experts dumbfounded over why the SEC would accept Madoff’s settlement offer to be barred from working with any broker, dealer or investment adviser, without demanding he accept responsibility for his $65 billion fraud.
“You can only mock this,” said John Coffee, a professor at Columbia Law School. “I don’t think the SEC will be able to declare a victory in this case.”
Madoff, who has pleaded guilty to a $65 billion investment scam in a separate criminal case, is set to be sentenced on June 29. The 71-year-old former money manager could spend the rest of his life in prison. Even if Madoff served a lighter sentence there is little chance he could stage a comeback.
The SEC has been widely criticized for failing to detect Madoff’s fraud. It declined on Tuesday to comment beyond its administrative order.
But SEC sources said this was the normal course of events following Madoff’s February settlement with the agency.
That earlier settlement restrained Madoff from violating securities law and deemed the facts of the complaint were established and could not be contested by Madoff. But again there was no admission or denial of the findings.
Monetary penalties in the matter are still to be decided.
Madoff has been jailed since pleading guilty to criminal charges in March to a worldwide Ponzi scheme that investigators say bilked clients over 20 years.
The SEC’s internal watchdog is currently investigating how the agency might have missed warning signs about the fraud until Madoff’s sons went to authorities and told them he had confessed.
Michael Shapiro, a partner at law firm Carter Ledyard and Milburn LLP, said Tuesday’s SEC announcement was standard.
“It is sort of silly in as much as he has admitted his guilt in a criminal proceeding,” Shapiro said.
Reporting by Rachelle Younglai and Karey Wutkowski in Washington and Grant McCool and Martha Graybow in New York; Editing by Tim Dobbyn