SEC officials testifying at a Senate Banking Committee hearing pledged to do more to investigate Ponzi schemes.

SEC Inspector General David Kotz talked about his damning report on the SEC’s failure to follow up on the leads it had received over the years pointing to suspicions over Madoff’s investment strategies. He was followed at the witness table by certified fraud examiner Harry Markopolos, who told the SEC about Madoff's dubious trading strategy.

Markopolos praised the inspector general's report, but he said that Congress should hold government officials accountable when they overlook schemes like Madoff’s. “Putting agency heads in prison for willful blindness, malfeasance and corruption seems like it’s long overdue,” he said, according to Reuters.

Other SEC officials who were called to testify, including John Walsh, acting director of the Office of Compliance Inspections and Examinations, were apologetic about the agency’s failures. He said the SEC now plans to train more agents to recognize Ponzi schemes.

Indeed, on Tuesday, the agency charged a Brooklyn money manager, Philip G. Barry, with running a $40 million Ponzi scheme in which he allegedly spent his clients’ money on real estate, a pornography mail order business and other interests. The timing of the charges was likely not coincidental.

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