KC tie surfaces in Madoff scandal

A Kansas City connection has emerged in the sordid story of Bernie Madoff, the money manager alleged to have run a $50 billion Ponzi scheme.

The Securities and Exchange Commission admitted Tuesday that it had received credible information of Madoff’s misdeeds years earlier but had failed to act. Christopher Cox, the SEC chairman, announced an investigation into the commission’s asleep-at-the-wheelness.

According to reports, a lawyer named Eric Swanson headed one SEC investigation into Madoff’s activities. Swanson left the SEC in 2006. Earlier this year, he went to work for BATS Trading, a Kansas City company that operates an equity market. Swanson worked in New York City, according to a press release BATS issued upon his hire.

Swanson has become the focus of speculation due to his 2007 marriage to a niece of Madoff. Through a spokesman, Swanson says the romantic relationship with his wife began years after the SEC compliance team he helped supervise made its (ultimately worthless) inquiry into Madoff’s business. — David Martin