Friday, January 23, 2009
Suing the SEC
Here's a story that may just be the first of many -
Phyllis Molchatsky lost two million dollars she invested with Bernie Madoff. She plans to sue the SEC to get it back.
Molchatsky, who lives in the suburbs of New York City, says she invested everything she had in Madoff's fund through her broker because it seemed steady and safe. It didn't show wild swings either up or down...and her investment seemed a good one. Between 2001 and last year, it nearly doubled. Then she lost everything.
She says the money was supposed to cover her retirement, her adopted son's education, and her own medical bills if her recently diagnosed Parkinson's disease grew worse.
The suit is believed to be the first filed by an investor against the Securities and Exchanges Commission. The argument is that the SEC didn't do its job, didn't oversee what Madoff was doing, even ignored warnings that something was very, very wrong.
Molchatsky's attorney has filed an administrative claim for 1.7 million dollars. The SEC hasn't commented. If they refuse, a lawsuit will be next.
Experts expect the SEC to claim sovereign immunity. That's a holdover from a monarchy that basically claims The sovereign can do no wrong.
That's clearly an outdated notion.