Could Crowdsourcing Help the SEC Detect Fraud?

An anonymous reader writes "The SEC failed to catch Bernie Madoff largely because they are understaffed (a fact the SEC itself has admitted), under-funded, and simply lack the resources to adequately investigate his activities. Undoubtedly, there were other smaller incidents of fraud that have gone unpunished because of this deficiency. To solve this egregious issue, NERA Economic Consulting proposed crowdsourcing, the concept behind Wikipedia's existence. Proving financial fraud is essentially an exercise in finding numbers that do not match. Through crowdsourcing, regulators would make financial data publicly available to the masses, who would do the 'grunt work' of sifting through them to find discrepancies. But would it work?"

Comments

Would it work?

[raddan]

Maybe. Better than the current system, at least, considering that this guy was sounding alarms about Bernie Madoff more than 10 years ago.

Lies

[roman_mir]

Lies lies lies lies lies lies lies. Don't believe a word of it, not a single one.

SEC failed to catch Bernie Madoff because the system is corrupt, they have enough people, the problem is what KIND of people they have. You can increase their manpower by a factor of a million and if they still get the kind of people they have there now, they will not end up catching any Madoffs.

Madoff case is so outrageous: Harry Markopolos is the whistle-blower who uncovered Bernie Madoff's Ponzi scheme 10 years before the rest of the world learned of the biggest financial crime in history. ...
It was exactly as I had warned the government of the United States approximately $55 billion earlier. And as I stood in the lobby of that dojo, my sense of relief was replaced by a new concern. The piles of documents I had in my possession would destroy reputations, end careers, and perhaps even bring down the entire Securities and Exchange Commission (SEC), the government's Wall Street watchdog -- unless, of course, the government got to those documents before I could get them published. I grabbed my kids and raced home. - go to this link, there is a video there

more videos

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Don't believe the hype. It is not about not having enough people, it is the system that exists that is completely captive, the SEC needs to be disbanded for corruption.

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But I am libertarian, I don't actually care about some people losing their money because they are stupid, I am more concerned that government is part of the corruption scheme and it is helping the thieves.