Dumbest business moments of the decade

6 of 10

Nov. 7, 2005: SEC ignores Madoff warnings

Financial analyst Harry Markopolos sent the Securities and Exchange Commission a 21-page report contending that investor Bernard Madoff was running a Ponzi scheme. The document laid out a case Markopolos repeatedly made, to no avail, for nine years -- that Madoff's consistent double-digit returns were just too good to be true.

"Madoff Securities is the world's largest Ponzi scheme," Markopolos wrote, before listing 29 so-called red flags supporting the notion.

The SEC, as it would do again and again until Madoff gives himself up in December 2008, blithely ignored the report. "Clearly the SEC was afraid of Mr. Madoff," Markopolos later told a thunderstruck Congress. Not to mention its own shadow.

NEXT: Feb. 21, 2006: Top-ticking the housing market