Madoff Investors Slam SEC, Sue Agency For Negligence

Law360, New York (January 26, 2011, 3:53 PM EST) -- Six investors in Bernard L. Madoff’s defunct investment firm have sued the U.S. Securities and Exchange Commission, claiming the agency was grossly negligent in failing to root out Madoff’s $65 billion Ponzi scheme before it unraveled.

The fact that Madoff was ultimately responsible for the fraud does not absolve the SEC of responsibility, because the fraud was only made possible by the commission’s negligence, the investors said in a complaint filed Tuesday in the U.S. District Court for the Southern District of New York.

“Had the...
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