Madoff Kept Multiple Books, False Documents: SEC

SEC chairman Christopher Cox said in a statement his agency is reviewing vast amounts of records involving Madoff and his firm. Madoff was recently arrested on charges that his firm defrauded investors out of up to $50 billion.

Those records show the complicated ways in which he deceived regulators and investors, Cox said.

"Mr. Madoff kept several sets of books and false documents, and provided false information involving his advisory activities to investors and to regulators," he said.

Meanwhile, Cox says that since 1999 his agency had received credible and specific allegations regarding wrongdoing by Madoff. Those allegations were not recommended to the agency for action, cox said.

He called those findings "deeply troubling."

"I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them," he said.

Instead of using a subpoena to obtain information from Madoff, the agency staff relied upon information voluntarily produced by Madoff and his firm, Cox remarked.

Cox has ordered a review of all past allegations in response to the findings. The review, led by the SEC's Inspector General, will attempt to discover why the allegations were not found to be credible, Cox added.

Internal policies about when allegations should be raised to the Commission level will also be explored.

All Staff contact and relationships with the Madoff family and the firm will be scrutinized, he said.