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Thin end of the wedge

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And hopefully there's more to come. This investor - who used to work for the SEC as an enforcement attorney - is forcing the SEC to defend its shoddy work and be held accountable. It's only a matter of time before a flood of lawsuits hit those who guided investors to Madoff as well as anyone who reviewed and confirmed the books. The big accounting firms clearly have learned nothing from the Tyco/Enron scandals and are seemingly indifferent to their own poor reputation in the market. How long can they continue to charge so much and deliver such questionable results?

An investor who lost nearly $2 million investing with Bernard Madoff has filed a claim against the U.S. Securities and Exchange Commission (SEC) alleging the agency was negligent in failing to detect an alleged decades-long fraud, the Wall Street Journal said.

Phyllis Molchatsky, a 61-year-old retiree from Valley Cottage, New York, is seeking $1.7 million in damages from the agency, the paper said.

The claim is believed to be the first attempt by an investor to recover lost money from regulators, according to the paper.

The SEC's "statutory purpose is to protect the public interest," Howard Elisofon, the lawyer representing Molchatsky, told the paper.

"We feel they fell down on the job in this instance," Elisofon, who is also a former SEC enforcement attorney, told the paper.

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