Bernard Madoff ran the largest Ponzi scheme in history, defrauding thousands of investors out of $50 billion. The SEC failed to uncover the fraud despite numerous red flags and warnings about Madoff's operations. An investigation by the SEC Inspector General found major mismanagement in how the SEC handled its investigations of Madoff, including a lack of supervision, failure to verify information from third parties, and inadequate sharing of information between SEC departments. The SEC has acknowledged problems with its enforcement procedures that allowed Madoff's scheme to continue operating undetected for years.