BRIEFS
RISING STARS SPOTLIGHT
GENEVIEVETTE WALKER-LIGHTFOOT HAD EVIDENCE IN 2004 THAT BERNIE MADOFF
WAS COMMITTING FRAUD; NO ONE LISTENED BY AMY KATES
WHISTLE BLOWN
In 2004, Genevievette Walker-Lightfoot,
a lawyer in the Office of Compliance
Inspections and Examinations at the
Securities and Exchange Commission,
was asked to analyze the trade account
documentation of an investor whose
strategies had been questioned by industry
insiders. As she sat at her desk, she tried to
make sense of the bizarre data blinking on
her screen.
Too many trades, she noticed, were
settling outside the “T+ 3” framework.
“Generally equity settles T+ 3—trade date
plus three business days,” Walker-Lightfoot
says. “So if you execute a trade Friday,
by Wednesday, that trade should settle.
But I saw trades being settled T+ 2, T+ 4,
T+ 6, on weekends—trades don’t settle on
weekends.” She started combing through
for exceptions, but couldn’t find any.
“You can have trades that execute, say,
T+1, like a straight cash transaction,” she
says. “That’d be like one in 100 transactions;
you don’t see 90 percent outside of the
normal framework of a trade,” which is what
she was getting. She came away with only
one explanation. “I was looking at the Holy
Grail of fraud,” she says.
The investor? Bernie Madoff.
“We could have been heroes,” Walker-
Lightfoot says. “We would have saved
many people a lot of money—investors
who would have saved the market a lot of
irreparable damage.”
Instead, despite Walker-Lightfoot’s
whistle echoing through the halls of the
SEC that day, Madoff continued operating
unchecked for years. In 2009, he would
plead guilty to 11 federal felonies. His Ponzi
scheme is considered the worst instance of
financial fraud in U.S. history.
“I got the call to pack it up,” she says.
“All the information was taken away.
After three years at the SEC—to sort of be
screaming, ‘Hey! Fraud over here! Don’t you
at least want to look at it?’ ‘No, we don’t
want to look at it. In fact, we don’t even
want you to look at it’—the tenor really
changed. I used to be very proud to work
there, and it began to be a place that made
me not feel that way.”
Eventually Walker-Lightfoot filed a
hostile work environment claim against
the SEC in 2005, which settled in her favor,
and in early 2006 she left for the Federal
Reserve Board. That’s where she was when
Madoff was arrested in December 2008.
She remembers thinking: “Oh my God. I
was right!”
News of her whistle-blowing attempts
has helped her build her Columbia-based
private practice, which opened for business
in October 2011. “Mostly I’ve been working
with firms and individuals from word of
mouth with the Madoff issue,” she says.
“People trying to prove or show fraud
in certain types of lawsuits that they’re
bringing. … Securities law will still be a
part of my practice, but also arbitration,
ethics and general compliance.”
Walker-Lightfoot says the SEC is on the
upswing. “I think that as certain people left
or were sort of asked to leave, certain road
blocks were removed,” she says.
“The funny thing is—and people
think I’m lying when I say this—when
I came to college, I wanted to work for
the government,” she says. “I believed in
working for the greater good, as corny as
that may sound. And I actually did it. That
little working-class upbringing, minority
child from Long Island came here, and
she actually did it. That is something I’m
