S.E.C. Incompetence

I just heard a detailed accounting of how Bernie Madoff has been able to pull off his $50 Billion scam over several decades. You can listen to it here (tune to 36:00). Here's the article of the interview subject, Binyamin Appelbaum.

One critical part of the story that is not yet mentioned on Wikipedia is how a competitor of Madoff's named Harry Markopolos took a careful look at what Madoff was doing. He concluded it was a scam way back in 1999. So he informed the U.S. Securities and Exchange Commission (S.E.C.), not just once, but multiple times. They ignored him repeatedly. Finally, in 2005 they did investigate Madoff and ... wait for it ... concluded that he was legit!

How on earth could the S.E.C. have failed to detect this massive crime? Was it just pure incompetence or was someone paid off?

This clearly had to be the rotten cherry on top of a year where the very roots of our entire financial system has been badly shaken.

---

Update: Sadly, one of the investors of Madoff, has allegedly committed suicide: