Even Madoff himself was apparently “astonished” U.S. Securities and Exchange Commission investigators didn’t catch him earlier.

Bloomberg reports that “They [the SEC] never verified Madoff’s purported trading with any independent third parties.” Even after he gave them details of his account at an independent clearing agency!

And besides their apparent failure to crunch the numbers, SEC staff and supervisors “consistently demonstrated they were inexperienced, inept and easily duped,” said James Cox, a law professor at Duke University in Durham, North Carolina.

Here’s one rather telling example about the time the SEC asked how he achieved his returns on investment. Inspector General David Kotz wrote “Madoff never really answered the question, Madoff claimed his remarkable returns were due to his personal ‘feel’ for when to get in and out of the market.” And he added, “Each member of the enforcement staff accepted as plausible Madoff’s claim that his returns were due to his perfect ‘gut feel.’” The old crystal ball strategy. Nice.

Guess the tooth fairies and Father Christmas are alive and well at the SEC too.