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Today Congressman Bill Posey (R-FL) led 19 of his colleagues in introducing H.R. 4934, Maintaining Agency Direction on Financial Fraud Act (MADOFF Act), legislation to block new climate change disclosure requirements which the Securities Exchange Commission recently created. The bill mirrors S. 3032 introduced in the Senate by Senator John Barrasso (R-WY).
 
“I think the SEC has its priorities wrong,” said Congressman Bill Posey. “We know the SEC was given all of the evidence on Bernard Madoff’s $65 Billion Ponzi scheme in 1999 and they failed to act. Many institutional investors spurned Madoff in the early 1990s due to discrepancies.  Why didn’t the SEC take action?  Instead of mandating climate change reporting, perhaps the SEC might do its real job and protect investors from fraud and abuse. They can start by finding out who within their agency ‘dropped the ball’ on Madoff.” 
 
“For years, the SEC missed all of the clues about Bernie Madoff’s Ponzi scheme,” said U.S. Senator John Barrasso. “It’s clear the SEC should focus on its core mission of protecting American investors and maintaining fair markets. Instead, the SEC now wants to devote time and resources to climate change. While the President says that job creation and the economy are priorities, his Administration continues to take its eyes off both. The American people are furious about being put on the back burner yet again. Our bill will help ensure Washington focuses on the economy and putting Americans back to work.”
 
Last week Posey and 20 House Members wrote to Commissioner Mary Schapiro asking for a further explanation into the SEC’s decision to create climate change disclosure requirements.
 
“I am also concerned that the SEC is implementing this mandate without the consideration of Congress or through the normal rule-making process,” added Posey.  “It is also particularly worrisome to impose these costly mandates as the economy continues to struggle to recover from recession.”
 
While the SEC has had the long standing authority to impose environmental risk requirements on companies, to date there are no federal laws explicitly addressing climate change and it’s uncertain how a company would measure its own climate change impact when much of the science is increasingly uncertain.
 
For more than a decade, the SEC ignored overwhelming evidence that now convicted investor Bernie Madoff was running history’s largest ponzi scheme ever. It wasn’t until everything came crashing down that Madoff was turned in, charged and convicted despite evidence that private investors were suspicious as early as 1991 of Madoff's methods. Posey said it’s still unclear as to why the SEC didn’t move years earlier to investigate Madoff after having all of the evidence handed to them by investigator Harry Markopolos. “This new mandate just takes the SEC’s eyes off the ball yet again,” concluded Posey.
 
Last October, Posey introduced the SEC Delinquent Judgment Act, legislation to refocus the Securities Exchange Commission on uncovering and hunting down those who commit securities fraud.
More specifically, Posey’s bill authorizes the agency to contract for collections operations freeing up more personnel and resources to prevent fraud and detect it years earlier.