Bernard Madoff, who ran the biggest investment fraud in history, was allowed to settle civil fraud charges with the U.S. Securities and Exchange Commission without having to admit any wrongdoing.
Tuesday's announcement left some legal experts dumbfounded over why the SEC which has been roundly criticized for failing to detect the Madoff fraud would settle the case without demanding the jailed swindler accept responsibility.
"I am rather surprised that they would agree to a resolution or settlement where he doesn't admit guilt in light of the enormity of the fraud, especially in light of the SEC being under so much criticism for being asleep at the switch," said Bradley Simon, a criminal defense lawyer in New York not connected to the Madoff case.
Madoff, who has pleaded guilty to a $65 billion investment scam, is set to be sentenced on June 29. He could spend the rest of his life in prison.
Calls to the SEC were not immediately returned.
The SEC said the former money manager is also barred from association with any broker, dealer or investment advisers. Madoff, 71, has been jailed since pleading guilty to criminal charges in March to a worldwide Ponzi scheme that investigators say bilked clients over 20 years.
The SEC's internal watchdog is currently investigating how the agency handled the case amid accusations that it missed warning signs and failed to uncover the scandal until Madoff's sons went to authorities and told them he had confessed to the fraud.
Michael Shapiro, a partner at law firm Carter Ledyard and Millburn LLP, said the SEC announcement was a standard settlement when there is no trial.
"It is sort of silly in as much as he has admitted his guilt in a criminal proceeding," Shapiro said.
