Madoff Victim Lawrence Velvel
Dean Mass. School of Law at Andover

A Massachusetts law school dean that lost money invested with swindler Bernard Madoff said that the Securities and Exchange Commission (SEC) was “willfully, horribly negligent” in failing to monitor his operation.

Lawrence Velvel, dean of the Massachusetts School of Law at Andover, said, “The SEC’s incredible willful negligence” to not seriously investigate Madoff’s operations despite repeated red flags and written warnings of his criminality probably makes the agency liable to legal action by aggrieved investors. The SEC, he said, “has no discretion—none—to fail to follow up, with serious investigations, when presented with knowledgeable, detailed, obviously highly competent, and in many respects easily ‘checkable’ allegations of...a huge fraud that is fooling thousands of people, stealing billions of dollars, and causing horrible injustice.”

Equally bad, says Velvel, the SEC was responsible for a lot of people being sucked into Madoff in the first place, because in 1992 it publicly announced that there was no fraud.

Referring to the preponderant majority of Madoff’s victims, Velvel said, “These are not the billionaires, or the huge institutions, that could hire expensive experts in due diligence…These are the plain people who worked hard and saved all their lives, as capitalism says they should, and who…depended on their government to protect them…but were failed by it because of one of the most willfully negligent, incompetent, and perhaps even complicitous courses of action any agency has ever engaged in.”