Friday, December 19, 2008

Audit Reform on Wall Street Needed Immediately

What I remember seeing on TV last night was something like real estate mogul Mort Zuckerman handing a check for thirty million dollars to an investment manager and then that investment manager turned around and outsourced it immediately to Bernard Madoff, ponzi king. Thirty million I am sure with some effort earned got pissed away in a few seconds.

I do not wish to criticize Mr. Zuckerman but I do wish to criticize the casual laissez faire way that Wall Street has been managed and audited for decades. No doubt the old boy’s image of frat house brothers covering each other butts in the market place with insider tips and growing rich together for being ahead of the investment curve is as true as it might be unfair.

The boomer generation and its dream to retire in wealth and not need the poverty dole of living on a social security check has been the goal of so many. In recent months the blatant mismanagement and now outright fraud of so much money and retirement funds of others being pissed away in a few seconds is not myth. It is real.

What I do not understand is that with all the speed and sophistication of computers, why can’t you get a print out in a few second to show where everything is or should be in the inventory of cash, securities and liabilities.

To blame the Securities and Exchange Commission is to blame the wind.

These securities companies have enough confidence to outsource a great number of jobs to Asia from the United States and with the help and sophistication of computers and programming.

When it comes to doing an audit in any of these financial institutions, they would have you believe that a clerk with a green shade on his forehead and picking his nose is the person to see when you want to see or understand the workings of the financial operations. Bullshit!

The lack of any standard programming or instant audit reporting to the SEC in a flash of the speed of light is the step and fetch it response of the old boy’s network that make a fraud the size of Madoff’s fraud possible.

There was a story in 1995 about an old lady that died beyond 100 and who had lost everything in the 1929 stock market crash. This woman over six decades managed to accumulate a fortune of $22 million in the stock market which she bequeathed to Yeshiva University for women’s studies. I hope that Anne Scheiber’s bequest to women did not get pissed away last week or last year or in the last decade because of Bernard Madoff and the Duh crowd managing assets on Wall Street with a wink, nod and secret hand shake.

I hope that Mr. Zuckerman with his power in the communications industry will take a personal interest in the Anne Scheibers and Jane and John Q. Publics and the protection of assets on Wall Street. The archaic methods of audit and reputation has got to be replaced with 21st century standardized computer and asset reporting to a new overhauled SEC under the next administration.

There may be a silver lining in this recent tragedy and fraud of so many charitable institutions and individual investors.

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