US watchdog 'regret' over Madoff

Bernard Madoff was given a 150-year sentence in June

The US financial watchdog has expressed "deep regret" that it failed to detect the multi-billion dollar Madoff fraud.

Two top officials at the Securities and Exchange Commission (SEC) said it had failed in its "fundamental mission to protect investors".

Giving testimony to Congress, they outlined recommendations to ensure such a fraud does not take place again.

Last week, an investigation found the SEC had mishandled a string of probes into Bernard Madoff's business affairs.

It said the watchdog had bungled five investigations, despite many complaints over 16 years, into the $65bn (£39bn) fraud.

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

'Deep regret'

"It is a sobering and humbling experience," said the SEC's director of enforcement Robert Khuzami and acting director of exams and compliance John Walsh.

"We deeply regret our failure to detect the Madoff fraud and pledge to continue to fix the problems that contributed to this failure," they added.

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.

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.