Congress begins a probe today into why federal regulators who examined Bernie Madoff's investments eight times in 16 years failed to sniff out his decades-long $50 billion Ponzi scheme. Among those in the hot seat is Barack Obama's appointee for SEC chair. Mary Schapiro was involved in several of the fruitless investigations, reports the Wall Street Journal.
The SEC's failure to discover the burgeoning Madoff problem raises doubts about whether it can keep up with fraudsters. Each Madoff investigation missed the underlying problem, and apparently focused on unrelated practices, say observers. It's not clear whether investigators ever looked into bank records to confirm whether trades even took place. In 2007 an industry watchdog reported Madoff's firm didn't seem to have any customers.