WASHINGTON - BERNARD Madoff, who ran the biggest investment fraud in history, was allowed to settle civil fraud charges with the US Securities and Exchange Commission without having to admit any wrongdoing.
Tuesday's announcement left some legal experts dumbfounded over why the SEC - which has been roundly criticised for failing to detect the Madoff fraud - would settle the case without demanding the jailed swindler accept responsibility.
Madoff sons accused of fraud
NEW YORK - TWO former employees of the legitimate trading side of confessed swindler Bernard Madoff's operations sued his sons on Tuesday, saying they must have known their father's business was a sham.
In two separate lawsuits filed in New York State Supreme Court, former employees Reed Abend and Richard Stahl accuse Mark and Andrew Madoff of fraud for knowingly cheating them out of salaries when the company collapsed after Bernard Madoff's arrest last December.
'I am rather surprised that they would agree to a resolution or settlement where he doesn't admit guilt in light of the enormity of the fraud, especially in light of the SEC being under so much criticism for being asleep at the switch,' said Bradley Simon, a criminal defence lawyer in New York not connected to the Madoff case.
Madoff, who has pleaded guilty to a US$65 billion (S$95 billion) investment scam, is set to be sentenced on June 29. He could spend the rest of his life in prison.
Calls to the SEC were not immediately returned.
The SEC said the former money manager is also barred from association with any broker, dealer or investment advisers.
Madoff, 71, 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 handled the case amid accusations that it missed warning signs and failed to uncover the scandal until Madoff's sons went to authorities and told them he had confessed to the fraud.
Michael Shapiro, a partner at law firm Carter Ledyard and Millburn LLP, said the SEC announcement was a standard settlement when there is no trial.
'It is sort of silly in as much as he has admitted his guilt in a criminal proceeding,' Mr Shapiro said. -- REUTERS
