Surprise Kosher Supervision Visits, Bernard Madoff and the SEC

Surprise visits are built in to the process of the kosher supervision of butchers, restaurants and food producers.

The age-old concept is that a mashgiach must have the right to "come and go" as he sees fit, otherwise a butcher could easily conceal any of his violations of the kosher laws before any scheduled inspections. Common sense.

Looks like the SEC is getting it too, thanks to that not-so-kosher butcher of investments, Bernard Madoff.

The Fox writer below doesn't think this style of supervision will help prevent all the future Ponzi schemes, "The SEC's proposed system would not have stopped Madoff's scheme before it started; it might have stopped his scam from growing so large."

In Talmudic terms, Mashgiach supervision will not guarantee that all the meat you eat is proper. But it certainly helps keep things kosher.
SEC's Pop-quiz Proposal Won't Stop The Next Madoff
Chuck Jaffe, MarketWatch

BOSTON -- Apparently the way to stop a guy like Bernie Madoff from making off with gazillions of dollars is to threaten him with a pop quiz.

That may not have been the message that regulators intended to send last week, but that's how it came across. The Securities and Exchange Commission voted unanimously to require most investment advisers to submit to surprise exams by outside auditors. The proposal is open for public comment for 60 days, after which it can be formally adopted.

The idea of these surprise exams is simple: Crooks like Madoff basically can deceive the public about the health of the funds they run. If they are forced to periodically and without warning open the books, they won't be able to keep a con game rolling; with the rising tide of Ponzi and pyramid investment schemes, this measure will make it harder for bad guys to succeed.

"Investor confidence has been shaken," SEC Chairman Mary Schapiro said before the vote. "Investors are looking to the SEC to ensure safekeeping of their assets, and we cannot let them down."...more...

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