The 536 exhibits released by the SEC Inspector General late Friday on Bernie Madoff don't seem to contain any explosive new revelations, but underscore an essential point about SEC investigations: if you are the target of a probe, just lie, again and again.

The SEC won't check up, even if it's obvious.

Notes of Bernie Madoff's interview with the SEC inspector general were released on Friday, and they make fascinating reading--as long as you keep in mind that Madoff was lying through his teeth, primarily to protect people.

Here's the SEC exhibits page, and here (PDF) is the record of Madoff's interview.

It's still unclear how many former BusinessWeek editors will be hired by Bloomberg L.P., but one thing is increasingly clear: it could have been a hell of a lot worse. Peter Kafka describes the nightmare scenario: a purchase by private equity bloodhounds ZelnickMedia that would have been only marginally better than a simple shutdown of the magazine.

This is how one-sided the Zelnick offer would have been: McGraw-Hill (MHP) would have wound up paying Zelnick to take BW off its hands. In return, BW would have been ripped limb from limb, and the entire staff would have been laid off.

That was fast. Steve Adler's resignation from BusinessWeek was announced late Tuesday, and according to Keith Kelly it is likely to be followed by others. Kelly makes it seem as if the staff is in chaos, with one other top editor likely to go and the status of another unclear.

Bloomberg has a reputation for being no-nonsense in such matters--in contrast to McGraw-Hill (MHP), which kept the magazine's top masthead in stasis even as it drowned in red ink. Still, I was expecting a bit more of a transition period.

There is, or should be, a furor over a gent named Storch being named as the first chief operating officer of the SEC enforcement division.

No, not this Storch:

Bloomberg L.P. officially became the buyer of BusinessWeek today, as expected. Here's a memo to the BW staff by the soon-to-be-former owner, and here's a Bloomberg press release.

A few things are left unclear in the official pronouncements, and they're not minor:

Continuing the maddeningly inconsistent coverage of the sale of BusinessWeek, Reuters reported that McGraw-Hill (MHP) is "leaning heavily" toward selling BusinessWeek to Bloomberg.

Meanwhile, Keith Kelly reports in the New York Post that all is quiet on the Bloomberg front: ". . . the board has yet to meet to consider the Bloomberg offer or any other offer. The board is not expected to meet in the next few days."

The first issue, Sept. 7, 1929

Most publications would haul out all the trumpets for their 80th birthday, but BusinessWeek, ailing and for sale, has confined its trumpeting (so far, at least) to an online feature a couple of weeks ago. I think that's a shame.

The White House isn't the only building in Washington with a hotline

Patrick Byrne has a new conspiracy theory to explain why his corporate crime petri dish Overstock.com (OSTK) is under investigation by the SEC. Seems that short sellers, in addition to having a fax machine at CNBC, also have a hot line to the SEC, in which they bark out orders to start investigations against innocent CEOs like Byrne.

My old colleague Bruce Nussbaum, BusinessWeek's innovation guru, has an interesting blog post that is pretty much a first: a current BW staffer publicly engaging in soul-searching about the magazine's troubles, rather than just blaming it on the recession and exonerating the people who have been in charge for the past four years.

You have to go to the video to get Bruce's thoughts on this. He says:

I've chronicled in this blog how my alma mater BusinessWeek has been decimated in recent years, with layoffs that have ousted its most experienced writers and editors. That, combined with an ill-conceived redesign and other missteps, has hurt the magazine editorially and been a commercial flop.

Word emerged yesterday that McGraw-Hill (MHP), apparently to spiff up BW to make it more appealing to buyers, has a plan to decimate the staff even further. Following up on her article from Monday, Stephanie Clifford of the New York Times lays out plans on a Times blog to fire one-fifth of the staff.

The New York Times today has a sobering article that remedies a deficiency in coverage of BusinessWeek's recent troubles and pending sale. Rather than focusing on "suitors" and the broad numbers, Stephanie Clifford describes exactly how BW got in this mess. There's some disturbing stuff in this article.

I've long been impatient with the tendency to exonerate top management from responsibility for my alma mater's troubles, and to blame the whole thing on the economy. As the Times points out. BW's "share of the ad pages among competitors — Fortune, Forbes, Inc. and Fast Company — has fallen in the last six years."

Great news for my alma mater: According to Keith Kelly at the New York Post, Bloomberg L.P. has tossed its hat in the ring for BusinessWeek (MHP).

Until now, the outlook for BW was bleak. The only bidders on the horizon, except for Joe Mansueto, were private equity shops that would have unhesitatingly ripped the guts out of BW -- even more than its guts have been ripped out under its inept current management. Bloomberg might actually turn it into a viable magazine again.

Bloomberg reported the surprising news that BusinessWeek was drawing the interest of 93 potential buyers. The basis was a televised interview with the CEO, Terry McGraw.

Paid Content immediately tossed cold water on that, and Business Insider weighed in with a report saying that BusinessWeek morale is, surprise surprise, "dangerously low."

There was weeping and wailing and blubbering among inept CEOs across the land in recent days as a federal court judge threw out a junk lawsuit against hedge fund manager SAC Capital Advisors and Gradient Analytics by the veteran underperforming blame-shifter, Biovail Corp (BVF).

In retrospect it was one of more well-engineered blame-shifting lawsuits of recent years, as this cruddy little pharmaceutical company carefully targeted one of the least sympathetic hedge fund managers in creation. Biovail even managed to con 60 Minutes into a brain-dead segment celebrating its cause. But at the end of the day junk is junk, and out the suit went.

If I were a betting man (and mind you, I suck at betting), my guess would be that Bruce Wasserstein will buy BusinessWeek. That seems to be the conventional wisdom (see here and here), and I agree.

BW's Jon Fine even says, in an casual reference in his latest blog post, that Wasserstein is "the candidate among the known potential bidders most favored by the rank-and-file at BusinessWeek."

Judge Richard Sullivan is taking a big risk by refusing to release Frank DiPascali, the Bernie Madoff CFO who has become a cooperating witness. Not a personal risk. Oh no.

It's a low-risk move from the CYA perspective. Had Sullivan released DiPascali, as prosecutors wanted, he might well have been skewered by Madoff's many victims. And obviously, if DiPascali had fled, as Sullivan warned was a realistic possibility, he'd never hear the end of it.

Overstock.com's (OSTK) wacky CEO Patrick Byrne has been flacked to the news media by his two p.r. firms in recent days, giving a series of softball video interviews and expounding on his formula for "success"--i.e., years of unprofitable losses and occasional "profits" through accounting card tricks.

I'm not surprised that any of the interviewers have asked Byrne about his accounting, which I doubt most would understand, but I am surprised that none of the interviewees have raised an obvious question: Who is the Sith Lord?

Jeff Bercovici has a provocative post today at Daily Finance suggesting that a bunch of well-known media titles, from Monster.com to BusinessWeek, are destined for that great copy desk in the sky.

Apparently BW was the favorite of the "brain trust" that he assembled: