SEC mea culpa on Madoff: pretext for federal bailout?

I don’t trust Chris Cox’s sudden bout of candor about the SEC’s failure to prevent or at least mitigate the alleged Madoff fraud. Cox unexpectedly admits:

The Commission has learned that credible and specific allegations regarding Mr. Madoff’s financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the Commission for action.

This smells to me like the beginnings of a public campaign for a bailout of Madoff’s victims. Almost never do regulatory agencies admit error, much less what amounts to negligence. I would think that Cox’s admission would help counsel for plaintiffs overcome a sovereign immunity defense.

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