Examiner.com – David Kotz, Securities and Exchange Commission Inspector General, told the U.S. House Committee on Financial Services last week he was determined to learn "the reasons for the SEC’s apparent failure to act" on repeated warnings about Bernard Madoff’s massive $50 billion Wall Street swindle.

The SEC had first been warned about Madoff in 1999 and again in greater detail in 2005 by Harry Markopolos, a Boston accountant and securities consultant.  Markopolos noted several dozen "red flags" in a 19-page memorandum he prepared for the SEC that should have triggered agency interest in Madoff’s ponzi scheme.

Markopolos, a former U.S. Army Special Operations commander who led clandestine teams in Europe and Africa in the mid-1990′s, had made it easy for SEC officials by titling his 2005 report The World’s Largest Hedge Fund is a Fraud. 

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MSN Money UK – Bernard L. Madoff Investment Securities LLC was examined at least eight times in 16 years by the U.S. Securities and Exchange Commission (SEC) and other regulators, who often came armed with suspicions, the Wall Street Journal said.

SEC officials followed up on emails from a New York hedge fund that described Bernard Madoff’s business practices as "highly unusual," the paper said.

The Financial Industry Regulatory Authority, the industry-run watchdog for brokerage firms, reported in 2007 that parts of the firm appeared to have no customers, according to the paper.

Madoff was interviewed at least twice by the SEC, the paper said, adding that regulators never came close to uncovering the alleged $50 billion Ponzi scheme that investigators now believe began in the 1970s.

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