And Now This

This is really hard to read, so don't do it after you eat.

As is our mission here at the Newsletter, I'll condense the key parts of the story by ruthlessly cutting and pasting from the actual story.

Seems there is this woman, Megan Cheung, in New York - age 37 - who is the head of the NY Branch of the SEC. Guy comes to her in 2005 with a lengthy memo to the effect of "Bernard Madoof is a crook running a giant Ponzi scheme." She investigates and finds "no evidence of fraud."

"Cheung, branch chief in New York, actually investigated [Markopolos' claims] but with no result that I am aware of. In my conversations with her, I did not believe that she had the derivatives or mathematical background to understand the violation," Markopolos wrote.

Cheung said that when she read a critical New York Times piece on Sunday mentioning that e-mail, she was on a plane with her children, and that she burst into tears.

As for Markopolos' reference to her supposed lack of mathematical acumen, Cheung said, "Investigations are conducted by lawyers and examiners and investigators. We have experts available to help us."

Cheung and other SEC staffers had met Markopolos in New York in November 2005, after years of him suggesting to the agency that Madoff was an arch-crook. Markopolos once had worked at a rival firm, but Cheung told The Post, "I didn't have enough interactions with [Markopolos] to be able to judge his motivations."

Markopolos gave the investigators a long memo that flatly said that "Madoff Securities is the world's largest Ponzi scheme."

Three years later we learn that Madoff was, in fact, running a giant Ponzi scheme. And that Meghan Cheung is &*^%ing incompetent. Her response?

"Why are you taking a mid-level staff person and making me responsible for the failure of the American economy?" an upset Meaghan Cheung, with eyes tearing up, told The Post.

"I worked very hard for 10 years to make a career, and a reputation, and that has been destroyed in a month," said Cheung, who was the SEC's branch chief of the New York enforcement division during that unit's earlier probe of Madoff's brokerage business.

I don't blame her for the failure of the economy - no one does. Everyone makes mistakes. But this was, well, a HUGE *&^%ing MISTAKE. There had to be red flags everywhere. But she was clearly way too young and inexperienced to handle a job like this in the first place. Who the hell promoted her? I want some damn answers.

All of this is a big reason why I have absolutely no faith that increased regulation is going to make anything better. The whistleblower, Markopolos, apparently gave the SEC a roadmap THREE YEARS AGO, and from the sound of it, he was making waves even before that. I don't think the SEC could find fraud if it had the coordinates and a GPS.