SEC Sues Madoff CCO for Lying about Compliance Program
The SEC filed suit against Madoff’s Chief Compliance Officer (and brother) for failing to implement and test and effective compliance program, among other violations. The SEC charges that the defendant drafted extensive policies and procedures for the Madoff investment adviser entity but never implemented or tested the procedures. The SEC charges that the defendant created completely false annual compliance reports under Rule 206(4)-7, which included false representations about the compliance program’s effectiveness. The SEC also alleges that the defendant lied about the compliance program in the Form ADV and in certifications to clients. The SEC argues that part of his ill-gotten gains includes his salary.