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Madoff Market Reform According to Mary

To: Congressman Barney Fife (oops, Frank)
From: Mary Shapiro, SEC Chairwoman

RE: Madoff-driven Market Reform

Dear Barney:

After hearing about the comments you made on the Madoff blog, I'm compelled to inform you that we have formed numerous of our own internal committees to study and make recommendations about the issues you expressed concern over.

As much as some would like to lament about SEC staff member qualifications, having been a long-standing authority figure within the financial regulatory arena, I take exception to any insinuations, even if made by former Chairman Chris Cox, that we are nothing other than accomplished bureaucrats.

 I have remained in close contact with former Chairman Cox, and while he believes that I am more qualified than he is to head your proposed CARP agency, we also agree on the steps that Congress needs to enact in the course of financial market overhaul.

In fact, these proposals have already been embraced by among others, Tim Geithner, Ben Bernake, Hank Paulson, Jamie Dimon, and with regard to the Madoff debacle, most importantly, Steve Harbeck from SIPC. The proposal that we have submitted to President Obama includes, but is not limited to the following bullet points:

1. Immediately instruct the U.S. Mint to replace the verbiage "E Pluribus Unum" on all currency with the phrase "Caveat Emptor."

2. This same imprimatur shall be a required stamp on any document that relates to any type of financial instrument, insurance contract, brokerage statement, bank statement, and any financial statement published or distributed by any public or private corporation, or for that matter, any federal government entity. 

By definition, caveat emptor shall therefore mitigate anyone's ability to contest or to pursue any type of litigation involving claims of fraud, malfeasance, or financial chicanery.

Even you, Congressman Frank will appreciate that this approach will deliver hundreds of billions in annual savings to the US Economy, as the number of pain-in-the-ass plaintiff law suits that tax the resources of our regulatory agencies, our courts, and our health care system will disappear completely.

Along with that, there will be no outlandish payments for frivolous lawsuits, and of greatest importance, companies such as AIG will no longer need to waste time and postage stamps by sending duplicate claim denial letters to those that think their insurance contract actually covers something. Their balance sheet will balloon faster than the Bernie Dollar balances at Madoff's investment firm, and in turn, they will be able to pay back the $160 billion owed to the US Treasury within a matter of days, if not weeks.

Of course, if they retain Mr. Harbeck and Mr. Picard to assist them (which is part of our recommendation), the payments might take a little bit longer, but they will eventually be paid. Certainly before the second of Never.

We propose this in due respect to the plaintiff attorney community, including one of the more famous plaintiff lawyers in the US, one that happened to be a Madoff "victim", and who, at the expense of taxpayers, was a recent guest of the US BOP in connection with his own purported financial contract shenanigans. If the Caveat Emptor Clause were invoked when I suggested it while Chairwoman of the CFTC, all of the plaintiff lawsuits that he pursued back then would not even have been initiated!

Were the Caveat Emptor Clause introduced only two years ago, dear Irving Picard and even dearer Steve Harbeck would not be weighed down today by the daily distractions from self-proclaimed 'smart people' that neglected to follow the money and move their's into JPMorgan at or around the same time that JPMorgan removed their money from Mr. Madoff's management--merely a few months before Mr. Madoff's son began his tryouts for the Olympic curling competition by curling himself into the fetal position..

The Declaration of Independence was based on a social contract, not a financial contract. To solve all of the country's calamities, our Tea Party touts the Caveat Emptor Clause be introduced to the Constitution of the United States as soon as your committees review and approve.

This is an imperative, and I urge you to act with the same swiftness that you demonstrated when Hank Paulson served you TARP.

Most Respectuflly,
Mary

Full post as published by Bernard Madoff on March 19, 2010 (boomark / email).