Email
Print
ShareSEC CIO's First Week: Madoff Scandal Breaks
Posted by Bob Evans on Dec 18, 2008 10:46 AM
Talk about a tough first week on the job: just as investors and many others began intensely scrutinizing the SEC for its role (or lack thereof) in allowing the Madoff investment scandal to happen, Charles Boucher started his new career as CIO of the SEC. As they say, be careful what you wish for -- you might get it.
Boucher joined the SEC after a long career in IT on Wall Street, where he most recently served at Morgan Stanley as an executive director, overseeing "all technology audits for infrastructure, including information security and disaster recovery," an SEC statement said. Ironically, those two specific sets of responsibilities from Morgan Stanley -- information security and disaster recovery -- will be in huge demand in Boucher's new role, although the disaster wrought by Madoff and being felt viscerally at the SEC are not exactly the traditional sort for which a CIO is prepared.
On other other hand, CIOs today want to move beyond "traditional" roles and responsibilities, and Boucher's new position at the embattled agency could provide him with an excellent opportunity to do so. The commission last night said it would be instituting an extensive new tagging system to enhance basic transparency as well as e-discovery efforts. Also, the detailed probe being undertaken into the monumental deceptions carried out by Bernard Madoff will surely require Boucher and his team to test the SEC's IT capabilities to their absolute limits. So, like it or not, Boucher will get a dramatically accelerated look at just how good or bad his people, processes, and systems actually are.
To get a sense of the situation Boucher has stepped into, look at this excerpt from a recent statement by SEC Chairman Christopher Cox, who said the agency's actions with regard to Madoff are "deeply troubling" and leave him "gravely concerned":
Since Commissioners were first informed of the Madoff investigation last week, the Commission has met multiple times on an emergency basis to seek answers to the question of how Mr. Madoff's vast scheme remained undetected by regulators and law enforcement for so long. Our initial findings have been deeply troubling. The Commission has learned that credible and specific allegations regarding Mr. Madoff's financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the Commission for action. I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them.
Well, whatever the failures were within the SEC itself, the biggest failure is Madoff himself. And if you want to see him in action, check out the video in this earlier post as Madoff displays his talent as an extraordinarily good liar by telling an audience not to worry about guys like him stealing their money because the SEC's rules are so strict that it would be "virtually impossible" for a securities firm to commit any infraction.
Amid all the turmoil, at least new SEC CIO Charles Boucher can be certain of one thing: no matter how long he stays at the SEC, he won’t come across any situation messier and uglier than the one he walked into recently in his very first week on the job. Best of luck, Mr. Boucher.
This is a public forum. United Business Media and its affiliates are not responsible for and do not control what is posted herein. United Business Media makes no warranties or guarantees concerning any advice dispensed by its staff members or readers.
Community standards in this comment area do not permit hate language, excessive profanity, or other patently offensive language. Please be aware that all information posted to this comment area becomes the property of United Business Media LLC and may be edited and republished in print or electronic format as outlined in United Business Media's Terms of Service.
Important Note: This comment area is NOT intended for commercial messages or solicitations of business.