When massive fraud is committed eg in the Madoff case, the victims look for parties to sue. One set of possible defendants are the governmental and quasi-governmental regulators. In the Madoff case, some investors are looking to sue the Securities and Exchanges Commission (SEC), which as the name suggests, is supposed to regulate the securities industry.
In the United Kingdom, there have been lawsuits against the financial regulator the Bank of England although I am not aware of any successful lawsuits. The financial regulator is England is now the Financial Services Authority.
In Singapore, relevant regulators are the Ministry of Finance and perhaps the Singapore Exchange (SGX). I have not done any research on this matter, but my preliminary feeling is that there is no reason why the regulators cannot be sued if they are negligent in the discharge of their statutory or common law duties of care. In each case, it is important to note the scope of responsibility of the relevant authority as well as the areas in which they are alleged to have been deficient as regards the standard of care expected. It should be noted it is not possible to spot in advance all cases of fraud. However, in some cases, the fraud is supposedly apparent from the start.
In the Madoff case, there are allegations that there were red flags - obvious warning signs - for example, the audit firm supposedly auditing Madoff's multi-billion dollar operations were a small firm with only a handful of staff in total. Many investments funds invested with Madoff without doing due diligence and they are facing lawsuits from their investors.
In the United Kingdom, there have been lawsuits against the financial regulator the Bank of England although I am not aware of any successful lawsuits. The financial regulator is England is now the Financial Services Authority.
In Singapore, relevant regulators are the Ministry of Finance and perhaps the Singapore Exchange (SGX). I have not done any research on this matter, but my preliminary feeling is that there is no reason why the regulators cannot be sued if they are negligent in the discharge of their statutory or common law duties of care. In each case, it is important to note the scope of responsibility of the relevant authority as well as the areas in which they are alleged to have been deficient as regards the standard of care expected. It should be noted it is not possible to spot in advance all cases of fraud. However, in some cases, the fraud is supposedly apparent from the start.
In the Madoff case, there are allegations that there were red flags - obvious warning signs - for example, the audit firm supposedly auditing Madoff's multi-billion dollar operations were a small firm with only a handful of staff in total. Many investments funds invested with Madoff without doing due diligence and they are facing lawsuits from their investors.
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