Madoff: One Year Later

Experts, including Madoff attorney Ira Lee Sorkin, J.D. ’68, examine the scandal that left the financial world reeling a year ago.

March 15, 2010

By Jamie L. Freedman

One year ago, Bernard Madoff confessed to perpetrating the largest investment fraud of the 21st century, sending shock waves through the global financial community. A high-powered group of panelists—including Mr. Madoff’s attorney Ira Lee Sorkin, J.D. ’68, and award-winning New York Times financial reporter Diana B. Henriques, B.A. ’69, who is writing a book about the Madoff scandal—gathered at GW Law School March 10 to discuss the case and outline strategies to move forward.

Mr. Sorkin, co-leader of the securities litigation and white-collar criminal defense practices at the New York law firm Dickstein Shapiro, gave a detailed account of the day the scandal broke. “On December 11, I was visiting my two-year-old granddaughter’s preschool class in suburban Maryland when my cell phone rang,” he said. “It was Bernie Madoff. He told me that he’d been arrested by the FBI, was handcuffed to a chair and needed my help.”

Since Mr. Madoff had already confessed to the FBI, Mr. Sorkin’s role was primarily to perform damage control. As counsel to the man who had executed the largest Ponzi scheme in history—swindling $65 billion from investors—Mr. Sorkin was the victim of death threats and a plethora of anti-Semitic e-mails and attacks. “People couldn’t understand how I could possibly represent this man,” he said. “There was a real lack of understanding of what defense attorneys do.”

Mr. Sorkin, who was also a featured speaker at GW's Luther Rice Society's Second Annual Wall Street Symposium in New York City last week, then discussed the Securities and Exchange Commission. “The SEC has not been able to keep pace with the growth of this industry,” he said.

“How can an agency with 3,700 staff members possibly stay on top of hundreds of thousands of brokers, investment advisers, and hedge funds managing trillions of dollars worth of money worldwide?” he asked. “If I had my way, I would reduce the staff at the SEC in Washington by two-thirds and send them out to regional offices around the country where the frauds are occurring. If we had more examiners and inspectors out in the regions, they could pick up problems early and stop them in their tracks.”

Mr. Sorkin said he served two stints in the SEC’s New York office--as a staff attorney and director, responsible for supervising investigations and prosecutions of numerous violations of the federal securities laws, including stock manipulation, insider trading, mutual funds fraud, and fraud by investment advisors. “It was one of the most exciting times of my career,” he said.

Rounding out the panel of experts were Javier Bleichmar, partner, Labaton Sucharow LLP; James T. Conversano, director of forensic litigation, FTI Consulting; James D. Cox, Brainerd Currie Professor of Law, Duke University School of Law; Stephen Labaton, an award-winning reporter at The New York Times for 20 years who now practices law in Washington, D.C.; and Josephine Wang, general counsel of the Securities Investor Protection Corp.

The discussions were moderated by Paul Butler, associate dean for faculty development and the Carville Dickinson Benson Research Professor of Law at GW Law School, and GW Professor of Law Robert W. Tuttle, the David R. and Sherry Kirschner Berz Research Professor of Law and Religion.

The event marked the official launch of GW Law’s Center for Law, Economics, and Finance—a think tank for the study and debate of major issues in economic and financial law.