Because the Securities and Exchange Commission bungled pretty hard:
In May 2006, SEC investigators interviewed Madoff, who didn't bring along a lawyer. When asked how he consistently beat the market, he told the investigators, "Some people feel the market," the report recounts.No matter what we do the structure of our financial regulatory regime, the more important factor is what kind of people are actually doing the regulating. And the government needs to do a better job attracting top people to these agencies by improving morale and compensation.Madoff told the inspector general that he expected to be exposed when he told the investigators that his trading was processed through the Depository Trust Co., an important financial intermediary. He gave the SEC his DTC account number, which they could have used to verify the trades he claimed to have made."I thought it was the end, game over. Monday morning they'll call DTC, and this will be over," Madoff told the watchdog earlier this year. "And it never happened."
-- Tim Fernholz
