Gut the SEC, Stop the Next Madoff

WASHINGTON, October 19, 2009--Two of the victims of Bernie Madoff’s Ponzi scheme are suing the Securities and Exchange Commission for “negligence.”

“While it’s not clear whether their case will go anywhere, it’s undeniable that the SEC failed miserably in the Madoff case,” writes Alex Epstein, a fellow with the Ayn Rand Center. 

“The SEC’s mission is effectively unlimited; the SEC’s job is to use the coercive power of the government to do whatever the heck it feels will improve financial markets. Such a mission both shows a profound ignorance of and disregard for the unique ability of individuals on a truly free market to allocate capital efficiently. It also completely diverts the government from prosecuting criminals. Who has the time and energy to follow real evidence of securities fraud when you view your mission as, essentially, to manage the world’s largest financial market? Obviously not the SEC.

“Want to stop the next Madoff? Gut the SEC, and limit the government’s role to prosecuting real criminals.”

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Alex Epstein was a writer and a fellow on staff at ARI between 2004 and 2011.