Nobody Could've Predicted

That Chris Cox would suck ass.

The latest black eye for the commission came when inspectors and agency lawyers missed a series of red flags at Bernard L. Madoff Investment Securities. If it had checked out the warnings, the commission might well have discovered years ago that the firm was concealing its losses by using billions of dollars from some investors to pay others.

The firm was the subject of several inquiries over the years, including one last year that was closed by the agency’s New York office after it received a referral of potentially significant problems from the Boston office.

Similarly, the agency’s chairman, Christopher Cox, assured investors nine months ago that all was well at Bear Stearns. It collapsed three days later.

Between those two events, H. David Kotz, the commission’s new inspector general, has documented several major botched investigations. He has told lawmakers of one case in which the commission’s enforcement chief improperly tipped off a private lawyer about an insider-trading inquiry.