Madoff fraud probes 'a failure'
Bernard Madoff was given a 150-year sentence in June
The US financial watchdog mishandled a string of probes into the business of convicted fraudster Bernard Madoff, an investigation has found.
It said the Securities and Exchange Commission bungled five investigations despite many complaints over 16 years about the $65bn (£40bn) fraud.
However, the SEC inspector general's report found no evidence of improper ties between the agency and Madoff.
Madoff, 71, was jailed for 150 years at the end of June.
He admitted defrauding thousands of investors through a Ponzi scheme which he said had been running since the early 1990s.
SEC enforcement staff had "almost immediately caught [Madoff] in lies and misrepresentations, but failed to follow up on inconsistencies", the report said.
WHAT IS A PONZI SCHEME?
A fraudulent investment scheme paying investors from money paid in by other investors rather than real profits
Named after Charles Ponzi who notoriously used the technique in the United States in the 1920s
Differs from pyramid selling in that individuals all tend to invest with the same person
They had also rejected offers from whistleblowers to provide additional evidence, it added.
SEC Chairman Mary Schapiro said that the report, by David Kotz, "makes clear that the agency missed numerous opportunities to discover the fraud".
"It is a failure that we continue to regret, and one that has led us to reform in many ways how we regulate markets and protect investors."
A congressional hearing in February severely criticised five high-ranking SEC officials for their failure to stop Madoff earlier - three of them have now left the agency.
Madoff's firm was investigated because it made exceptional returns, but no irregularities were officially reported.
It was the global recession which in effect prompted Madoff's demise, as investors, hit by the downturn, tried to withdraw about $7bn from his funds and he could not find the money to cover it.
The list of Madoff's victims includes film director Steven Spielberg's charitable foundation, Wunderkinder - but school teachers, farmers, mechanics and many others have also lost money.