WASHINGTON, Dec. 17 (UPI) -- U.S. Securities and Exchange Commission Chairman Christopher Cox has ordered an investigation to see why the agency missed signs of a massive fraud case.
Cox said the SEC dismissed "credible and specific allegations repeatedly brought to the attention of SEC staff," concerning the case of New York trader Bernard Madoff, who is accused of defrauding investors of $50 billion in a Ponzi scheme, The Washington Post reported.
"Our initial findings have been deeply troubling," Cox said.
Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee has also demanded an account of the SEC's role in affair, the Post reported.
H. David Kotz, the inspector general of the SEC, said disciplinary action may be necessary for some against senior regulators.
Madoff, last year, bragged about his ties to SEC regulators in a speech in New York, saying "I'm very close with the regulators."
"As a matter of fact, my niece just married one," he said, referring to Eric Swanson, a former SEC official who married Shana Madoff in 2007.
A spokesman for Bats Trading, where Swanson now works, said Swanson had not participated in investigations of Madoff's dealings while involved with his niece.