COMMENTS: Paparazzi Follow Ponzi Defendantís House Arrest

The spectacle of fallen financier Bernard Madoff plowing through a scrum of paparazzi outside his ritzy Upper East Side apartment building put a human face on the Wall Street corruption scandal that broke last week. For the first time Madoff's prosecution for running his investment fund as a $50bn Ponzi scheme qualified as Story of the Day. CBS and NBC both led with the Madoff investigation as scrutiny turned to the failure of the Securities and Exchange Commission to supervise his trading. ABC chose to kick off with the deteriorating state of Detroit's automobile industry. Chrysler announced it will shut down its entire north American operation, 30 factories in all, for an entire month--perhaps never to reopen.

Madoff was forced to return to his Manhattan home as a condition of bail. He will be confined to his apartment under curfew, wearing an ankle bracelet to track his movements, pending trial. CBS' Bob Orr quoted SEC Chairman Christopher Cox as conceding that regulators had "repeatedly failed to thoroughly investigate allegations that Madoff was running a scam." Indeed Madoff's niece, a lawyer at his brokerage firm, is married to former SEC inspector Eric Swanson, "who at one point led the team looking into Madoff's financing." ABC's Brian Ross illustrated how easy it should have been for securities regulators to smell a rat. Madoff filed SEC forms certified by independent public accountants Friehling & Horowitz, "a one room operation in a small suburban office park outside New York--that alone should have been a tipoff."

On NBC Trish Regan, from the network's sibling financial news channel CNBC, reflected on the impact of the Madoff prosecution on investors generally: "Many people are now questioning whether their money is safe, not because the market is declining but because they are not certain they can trust regulators and their own investment managers." The $50bn that Madoff allegedly evaporated, Regan pointed out, is "twice the amount of money the auto companies are asking Congress for."


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