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Eight SEC employees disciplined over Madoff fraud

Timothy A. Clary / AFP - Getty Images

Bernard Madoff is shown leaving a US Federal Court in 2009. The SEC has reportedly disciplined eight employees over their handling of the massive Madoff fraud.

By msnbc.com staff

The Securities and Exchange Commission has disciplined eight agency employees over their handling of the Bernard Madoff investment scheme, according to a report in The Washington Post, which cites a person familiar with the actions.

An ninth person resigned from the agency before disciplinary action could be taken, the Post reported. A senior agency official and an outside consultant had recommended that one of the employees be terminated, the article said.

According to the Post:

“The punishments given the employees varied and included suspensions, pay cuts and demotions, according to the first person familiar with the matter. An employee who received one of the most severe sanctions got a 30-day suspension and a demotion. Another was given a pay cut of about 6 percent. At the low end, one employee was suspended for seven days, another for three days and yet another was issued a ‘counseling memo,’ which is a step below a reprimand.”

The SEC has come under fire for failing to stop Bernard Madoff’s investment fraud despite receiving warnings. In 2009, Madoff was convicted and jailed for 150 years after being found guilty of running a massive Ponzi scheme and swindling more than $50 billion from investors.