Madoff investor faces uncertain future

(Josh Brogadir, NECN: Newton, MA) - A House financial services committee is looking into why federal regulators did not uncover Bernard Madoff's alleged Ponzi scheme despite complaints for nearly ten years. One of the investors who lost his life savings in the scam testified at the congressional hearing. So, did the SEC's inspector general, who says he will examine the operations of the SEC's enforcement and inspection divisions and plans to make recommendations. The House hearing came one day before the seating of the new Congress, and is a first attempt to understand what went horribly wrong and how Madoff's alleged deceit was not detected. NECN's Josh Brogadir spoke with one of Madoff's investors. Edmund Case, the CEO of Newton, Massachusetts based non-profit Interfaithfamily.com, faces the difficult decision of figuring out where to go from here. Edmund: "Our budget is about a million dollars, we've been growing pretty steadily, and we figure that probably 10 percent of our income we're not going to get because of the Madoff situation." The online resource for interfaith families where one parent is Jewish, did not itself invest with alleged Ponzi schemer Bernard Madoff, but relied on generous donations from foundations who were Madoff investors. Edmund - "I have a lot of ill will towards Mr. Madoff, I think it's really, I don't really know what adjectives to use to describe what he did." He's also trying to find the adjectives to describe his frustration over how the SEC did not pick up on the scheme. Monday afternoon, congressmen wanted the same answers, grilling the SEC's inspector general on Capitol Hill... He promised to examine how the federal regulator missed warnings about Madoff dating back to 1999. Kotz: "we're also going to look at whether Mr. Madoff's stature and reputation had any impact, was there a question of well, this is Bernard Madoff and so we don't have to worry about him." Authorities say Madoff bilked as many as 8-thousand investors out of a total that could reach 50 billion dollars. Monday's hearing is a first attempt to understand why red flags were raised but not reviewed... Kanjo: "Other red flags include unrealistically steady investment returns and an auditor the size of a mouse examining a fund the size of an elephant." Back in Newton, Case is hoping other givers will step forward to help Interfaithfamily dot com, given the anticipation that this growing business will have to do more with less. Edmund: "we're trying to avoid reducing our staff, so one way to do that is to reduce pay for people and to reduce the amount of content we publish which is pretty essential to our organization, I mean that's one of the main things that we do."