SEC Launches Investigation of Bernard Madoff Following Markopolos' 21-Page Memo

In May 2006, Madoff is interviewed by the SEC. Insiders have told FRONTLINE that when SEC lawyers visited Madoff's office, he was visibly nervous and irritable.

In his March 2009 confession Madoff admits that he lied to the SEC during this interview.

In its case-closing recommendation the SEC said it "found no evidence of fraud" after Madoff's interview and his voluntary production of documents. It did find that Fairfield Greenwich needed to revise its disclosures to include Madoff's role and that Madoff needed to register as an investment adviser.

"I felt like I was an army of one," Markopolos said recently. "I was a $50 billion failure. I wasn't good enough or smart enough to outmaneuver the SEC, the press wasn't listening to me, and I had no other avenue."

The SEC said it would not comment on Markopolos, and would not make Manion or others available for interviews.

But in a statement Dec. 16 that bordered on a mea culpa, SEC chairman Christopher Cox said he was "gravely concerned by the apparent multiple failures" of the agency to follow up warnings about Madoff.