Contact: Bill Caldwell, Office of Public Information, Pace University, 212-346-1597, wcaldwell@pace.edu

NEWS SOURCE

Topic: MADOFF PONZI SCHEME HIGHLIGHTS HOLES IN SEC ENFORCEMENT

“ . . . further evidence of the urgent need for new and modified SEC regulations relating to financial institutions not adequately covered by existing laws and regulations.”

John Allan James, a management consultant and expert on governance and regulatory issues, is adjunct management professor at Pace University’s Lubin School of Business in New York.

Professor James is available to comment on the Securities and Exchange Commission and federal complaints against Bernard Madoff.

“The announcement of the arrest of Mr. Madoff for bilking investors in his managed funds of $50 billion provides further evidence of the urgent need for new and modified SEC regulations relating to financial institutions not adequately covered by existing laws and regulations. Organizations offering opportunities for larger profits, and/or offsets against risk, such as hedge funds, derivatives, and credit debt swaps are not clearly defined in existing regulations. It is within this ‘grey’ regulatory area that opportunists have created ‘new products’ such as mortgage backed security ‘packages’ that defy registration, transparency and have led to critical mistakes in oversight at every level in financial institutions, rating agencies, commercial and investment banks, regulatory agencies and the hallowed halls of Congress.

“Fortunately, many organizations dealing in these ‘exotic’ products have come forth to Congressional Committees to agree that new organization structures and regulations are needed to provide investors and regulators with adequate information and transparency. New type of exchanges for registering and regulating transactions are among the suggested remedies.

“Recently, Congressman Barney Frank made a very poignant statement regarding the need for new and stricter regulation of the financial institution sector. He predicted that the confusion and deep anger among the investing public, and, their elected representatives, will result in many new suggestions for the new Congress and new White House in January. He did, however, opine that he hopes that in the fervor of the moment that legislators do not ‘go too far’ and inhibit the creativity of the organizations so vital to the financial health and security of the business and public sectors.”

Email jjames@pace.edu .

James has been involved in governance issues for over 30 years. He created the first texts in English on Company Law in key European countries. These 12 publications provided the basis for the first international meetings on company, labor and employment law on a multi-country basis in Europe. He co-chaired the first global conference on Multinational Companies and Multinational Unions at the U.N. International Labour Organization center in Geneva, Switzerland. At Pace’s Lubin School of Business, James organized the first graduate level course in the U.S. relating to Comparative Corporate Governance, covering all aspects of governance and regulation in the U.S. and 60 countries around the world.

James was educated at Northwestern University and the University of Chicago, Graduate School of Business. He has lectured at INSEAD, Fontainbleau, France; CEI/IMEDE, Switzerland; Northwestern and Harvard European Executive Programs; IBM Management Development Centre, Brussels; World Economic Forum, Davos; United Nations Management Training Centre, Torino, Italy; Wharton, Univ. of Pennsylvania; Kellogg School of Management, Northwestern University; and Cornell University, School of Industrial Relations.

The Lubin School of Business is accredited for both business and accounting by AACSB International, an elite distinction shared by fewer than 3% of business schools worldwide. With a tradition of practice-oriented curricula, the school has achieved national recognition for both its graduate and undergraduate programs in U.S.News & World Report and other media. Approximately 4,000 students are enrolled in Lubin’s undergraduate, graduate and professional degree programs in Downtown and Midtown New York City, and Pleasantville and White Plains in Westchester. Prominent alumni include Melvin Karmazin, CEO of Sirius Satellite Radio; James Quinn, president of Tiffany & Co.; Ivan Seidenberg, chairman and CEO of Verizon; Marie Toulantis, former CEO of Barnes&Noble.com; and Richard Zannino, former-CEO of Dow Jones & Company. www.pace.edu/lubin.

For 102 years Pace University has produced thinking professionals by providing high quality professional education resting on a firm base of liberal learning, amid the advantages of the New York metropolitan area. A private university, Pace has campuses in New York City and Westchester County, New York, enrolling more than 13,000 students in bachelor’s, master’s, and doctoral programs in its Lubin School of Business, Dyson College of Arts and Sciences, Lienhard School of Nursing, School of Education, School of Law, and Seidenberg School of Computer Science and Information Systems. www.pace.edu

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