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SEC Tip Line Was Meant to Stop Another Madoff. Is It Working?

The headquarters building of the U.S. Securities and Exchange Commission in Washington, D.C.

The headquarters building of the U.S. Securities and Exchange Commission in Washington, D.C.

Photographer: Zach Gibson/Bloomberg

An SEC whistleblower program designed to prevent another Bernie Madoff-type scandal often ignores its own rules, shields much of its work from the public, and has been a financial boon for law firms that hired former agency officials, a Bloomberg Law investigation has found.

Written into the Dodd-Frank financial reform law of 2010 and championed by Sens. Elizabeth Warren (D-Mass) and Chuck Grassley (R-Iowa), it was created to make sure tips about financial wrongdoing aren’t ignored as they were before Madoff’s $64.8 billion Ponzi scheme.