Harry Markopolos, previously a whistleblower in the Bernie Madoff case, conducted an interview with Reuters regarding the SEC’s new “Tips, Complaints and Referrals” database, its unique partnership with the FBI and the implications of the current budget crisis.

Markopolos believes that Bernie Madoff served as a catalyst for rapid reform. In response, the SEC created the new TCR Database and forged a partnership with the FBI. He states that embedding an FBI agent within the SEC allows for instantaneous evaluation of incoming tips and parallel investigation between the two agencies. Markopolos also believes the SEC has made itself more equipped to pursue larger offenders like Madoff by training employees as fraud investigators.

When asked what weaknesses remain, Markopolos highlights municipal bond financing, derivatives, and fixed income trading as areas open to improvement. Furthermore, while Markopolos believes the Dodd-Frank Wall Street Reform and Consumer Protection Act is a step in the right direction, the rule-writing process and enforcement of the bill are the most important and as yet unrealized steps. Lastly, regarding the current budget crisis in Washington, Markopolos warns that any cuts to the SEC could have disastrous consequences, “It is penny-wise and pound-foolish to cut the SEC’s budget.”

Watch the entire video, “SEC meets FBI (YouTube)”