Today Congressman Barney Frank (D-MA) will grill the SEC on why it missed the $50 billion Madoff Securities Ponzi scheme. After all, over the last 16 years, the SEC investigated Madoff eight times and each of those times, it failed to discover the scam. This -- and so much more -- means it's time for a change in the way Washington regulates Wall Street.

And Frank is sure to use today's stage to talk. Last Monday, I appeared on a TV program in Boston "with" Frank. I put "with" in quotes because when Frank arrived at the TV studio, he made sure that me and any other guests who were to appear got thrown out of the green room so he could have it to himself. And while I was on the set with Frank -- I was scheduled to go on the show right after him -- he never even looked at me -- by contrast, every other person I have appeared with was happy to introduce themselves.

Frank likes to talk -- he used 25 of the 30 minutes (he was supposed to take up about 15 minutes). (And in the four minutes Frank left me, I gave out a few Bernie awards for the worst financial foibles of 2008.) So when he chairs hearings today, Frank will no doubt do quite a bit of talking. And he'll probably ask why the SEC officials failed to discover the Madoff scandal after receiving emails from a New York hedge fund that described his business practices as "highly unusual." As I posted, I think Frank should focus on the village that enabled Madoff.

Let's hope things get better this year.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing.

One of the more intriguing questions of the $50 billion Bernard Madoff Ponzi scheme is where did all of the money go. Investors now may get a rough idea as to what the man who was once considered by investors to be some sort of genius did with their life savings.

According to Bloomberg News, Madoff is due to file a statement today with the U.S. Securities and Exchange Commission listing his assets. That probably is one of the many, many conditions of his bail, including hiring a private security company to keep gawkers and the press away from his apartment building. I am sure the tenant's association meetings have been lively.

Before he was arrested, Madoff allegedly told employees that he had $200 million to $300 million left, according to Bloomberg. His lawyer declined to comment to the news service as to what happened to remaining funds. There are a couple of things to keep in mind.

Much of Madoff's fortune may be in tax havens such as the Cayman Islands, Bermuda or countless other small Caribbean nations. Finding it may be extremely difficult without the cooperation of Madoff or some of his closest associates.

Though Madoff claims to have operated the Ponzi scheme by himself, that probably is not true either. The logistics of keeping such a large fraud going for decades would be difficult if not impossible to maintain. Madoff, like many Ponzi scheme operators, is trying to take the rap himself. Perhaps he is trying to deflect attention from his sons, who both claim they had no idea what their father was doing.

The fact that Madoff is Jewish as were many of his victims is not surprising either. Many Jewish charities and philanthropic institutions did not bother vetting Madoff since he was of the same religion. Victims of fraud often never imagine that one of their own would try to steal from them.

For the many victims of Madoff's scheme, justice many be elusive. Their retirement dreams have been dashed and they will need years to rebuild their financial security. It may take years for them to recover a fraction of the money they lost from Madoff.

As the sordid tale of Bernard Madoff continues to unspool, it has become increasingly clear that somebody -- in fact, a lot of somebodies -- were asleep at the switch. Beyond the standard warning signs, like Madoff's incredible secrecy, his surprisingly consistent rate of return, and the clubby nature of his selling staff, there were far more obvious portents. For example, Madoff's chief compliance officer was his brother Peter, and one of the compliance attorneys was his niece. For that matter, the fact that Harry Markopolos, a Boston accountant, has been urging the SEC to investigate Madoff for the last nine years should have been a hint. The same, of course, goes for the 2006 SEC investigation that found violations, but didn't feel obliged to take any substantive action.

As the SEC attempts to assign blame in finest Three Stooges form, it's worth noting that this is hardly the first time that a lack of serious governmental regulation has reared its ugly head this year. At the moment, mobs are currently clamoring for Dick Fuld's head, with a healthy side order of Hank Greenberg, John Thain, John Mack, Lloyd Blankfein, Jimmy Cain, and pretty much everyone who works in New York's financial district. The general perspective seems to be that these men engaged in business practices that ran the gamut from risky to actionable and now should be forced to pay for the economy that they have ruined.

The Bernard Madoff tragedy just got more tragic: The Associated Press reports that the founder of a Manhattan hedge fund that invested with Mr. Madoff has been found dead in his office. A French newspaper has reported that the cause of death was suicide.

The news of Rene-Thierry Magon de la Villehuchet's death, and the Madoff connection is making headlines today. He was 65-years-old and married without children. A founder of the Access International Advisors fund, he had reportedly plowed $2.1 billion into Madoff's scheme.

A friend told AFP that for Villehuchet, "Access (International Advisors) was his whole life, and Madoff was a manager in whom he had complete trust. I lunched with him two weeks ago and he said, how lucky it was that Madoff was the only manager still doing well at the moment."

Suicide and fraud have been linked in past scandals as well. Shortly after the collapse of Enron, former high-level executive Cliff Baxter shot himself and left a note for his wife that read "Carol, I am so sorry for this. I feel I just can't go on. I have always tried to do the right thing but where there was once great pride now it's gone. I love you and the children so much. I just can't be any good to you or myself. The pain is overwhelming. Please try to forgive me. Cliff"

New York retiree Phyllis Molchatsky lost nearly $2 million in Bernard Madoff's alleged Ponzi scheme -- and she's as mad as hell and not going to take it anymore.

Realizing that suing Mr. Madoff won't lead anywhere, she's trying an innovative strategy: suing the Securities & Exchange Commission, alleging that the SEC was negligent in failing to detect and put a stop to the financial crime in progress. Ms. Molchatsky filed an administrative claim for relief, and if the SEC doesn't respond or negotiate within six months, she will have the option of suing the Commission in federal court.

SEC Chairman Christopher Cox has already admitted that the SEC failed to respond to specific and credible allegations of wrongdoing by Mr. Madoff over the years and said that he was "gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations."

Still, experts say it will be an uphill battle to win any damages from the SEC. As Law Professor Gregory Sisk said (subscription required) in The Wall Street Journal, "The government undoubtedly would argue that if liability is imposed here it creates a disincentive for the government to do any regulation in the future."

Of course the SEC screwed up badly here, but that's nothing new. If the SEC were held responsible for losses incurred as a result of its many failures to do its job, the damages would make the $700 billion bailout look like a breakfast buffet at Friendly's.

As the story unfolds, winning investors find that even though they took their funds out, they may have to repay some of their gains. That's because of something called "clawbacks." A court could rule that anyone who gained money from Madoff's Ponzi scheme must repay some of the gains even if the person had no idea the gains were fraudulent.

When it comes to a Ponzi scheme, unknowing early investors make their profits because the money from later investors is used to pay those profits. In the New York Times story this morning, the Times reviews the records of one investor who made millions with Madoff, even though he still had several million dollars in his account when the fund collapsed last week. The Times did not reveal his name because he is afraid he could be sought out to repay some of his gains.

Based on previous court rulings involving other frauds, winners have reason to worry. In past scandals they have had to give up some of their gains to even up the losses. Losers are likely to receive just 20 to 40 percent of their original investment. Clawbacks will help in an attempt to repay some of the losses.

Clawbacks could impact investors who received gains over the last six years, but how far back the courts will decide to go will be determined in the future when all the facts are known. Some believe investors could also sue other investors who drew them into this fraud. Whatever happens Madoff-related lawsuits will probably fill the courts for years.

Right now the Times reports only $20 billion of the possible $50 billion in losses have been identified, but more losers are expected to come forward. The $50 billion estimate is the number suggested by Madoff when he confessed to the fraud.

Lita Epstein has written more than 25 books including "Reading Financial Reports for Dummies."

Regulators did not just drop the ball in the Bernard Madoff scandal. They never held it in the first place.

According to the Wall Street Journal, the SEC discovered in 2006 that Madoff had misled the agency about how he managed customers' money. Moreover, investor Henry Markopolos spent the past decade trying to convince the agency that Madoff's returns were too good to be true. Markopolos and his friends tried to replicate his returns using complex mathematical models and could not.

Barron's reported that no one understood how Madoff made money and that the investors were pressured to never reveal that they had money with him. Ever hear of an asset manager who did not want rich people to brag about how well they did with them? But people did not need to try that hard to figure out that Madoff is a crook. All they needed was common sense.

Anyone who promises investors consistent double-digit returns is either a crook or a fool. The stock market does not work that way. It never has. The one aspect of this scandal that baffles me is how Madoff was able to convince sophisticated people at banks, charities and some of the nation's wealthiest families that the reality of the market did not apply to them.

As I posted over the weekend, it takes a village to pull off a $50 billion investment fraud. In the case of the Madoff securities fraud, that village may have included his investors, family, accountants, regulators, politicians and hedge fund bundlers. And it could be that part of that village included two New York senators and the SEC. How so? Campaign contributions from Madoff to two New York senators and a family relationship between Madoff and an SEC investigator may have deflected any efforts to shut down the fraud.

Were Madoff's Washington money connections enough to keep investigators away? It's possible. Senate Banking Committee member Charles Schumer, D-NY, was the top congressional recipient of Madoff's $267,000 in campaign donations between 2001 and the present. Schumer's campaign -- which received $32,000 during that period -- claims it has turned over the money to charity. Others in Congress have received smaller amounts from Madoff including Barney Frank, D-MA ($2,250) and Hillary Rodham Clinton, D-NY ($2,800).

Bernard Madoff 's $50 billion Ponzi scheme was so breathtaking that investors have been left speechless. But the alleged crook -- universally described as "charming" -- would not have succeeded were it not for the unbelievable gullibility of supposedly sophisticated investors.

Madoff knew that just because people were rich it did not not make them smart -- that was the source of his success. All you have to do is talk about an investment philosophy that is vague but sounds really authoritative. Give people nonsensical statements that they glance at quickly. Make sure that the statements indicate steady returns of 10% to 13% a year.

Many CFOs, CIOs and portfolio managers were amazed that Madoff produced such steady returns for so long. They were mathematically impossible. Barron's raised questions in 2001 about whether Madoff was "front-running" trades, an allegation he denied. Still, Madoff's rich buddies stood by his side.

Maddoff somehow managed to convince a slew of banks and hedge funds, billionaires such as Mets owner Fred Wilpon, Yeshiva University along with charities associated with Steven Spielberg and Nobel Laureate Elie Wiesel that the laws of investing do not apply to them. The odds of anyone getting double-digit returns year after year are laughably small. They, of course, understood that, but figured why fix something that ain't broke. By turning a blind eye to fiscal reality, these victims showed almost as much greed as Madoff.

Of course, they can sue. There's one big problem: Madoff's financial records are in such disarray they will take six months to sort out, according to Bloomberg News. Odds are victims will get back pennies on the dollar. It's an expensive lesson in the high cost of financial hubris.

When you hear about the outrageous accusations against Wall Street icon, now shamed, Bernard Maddoff, regarding his $50 billion Ponzi scheme and the corrupt thinking Illinois Governor Rod Blagojevich and his peddling of Obama's Senate seat, it almost makes you want to bring back the firing squad because their offenses are almost treasonous.

Are we not in the midst of a financial battle of historic proportion? If the charges against them hold true, have they not destroyed the lives of thousands of people, not to mention the integrity of both the political and financial systems at a time when our nation is in crises?

Unfortunately, as they used to quip in another time; "hanging is too good for them!"

I have another solution for them and all white collar criminals doing soft time, even if it is a long time, PUT THEM TO WORK!

At their base level, Ponzi schemes are incredibly simple: the schemer promises a consistent, impressive return on an investment, which he funds by soliciting new investors and using their money to pay off earlier investors. If the schemer can successfully project an air of reliability, he can often convince his investors to keep their principal in the fund, which means that he only has to pay dividends, improving his profit margin and extending the longevity of his scam.

Any intelligent person recognizes that a Ponzi scheme is, essentially, suicidal. Even in a consistently strong market, there will come a day when people will withdraw from the fund, investigators will shut it down, or the financial house of cards will fall apart. The best that a Ponzi schemer can hope for is that he will die before he is caught or will somehow be able to pull out all funds and make a run for it. In the case of Bernard Madoff, it's pretty clear that he was counting on the former. While this didn't work out, one could make a strong argument that Madoff's life currently isn't worth a plugged nickel: even if he somehow survives the next few months without suffering a massive coronary, chances are that a former investor or fellow inmate (or both!) will soon introduce him to the business end of a shank.

It won't take long for a flurry of lawsuits to be filed over the massive losses caused by the Madoff Ponzi scheme. Filing complaints is easy. Recovery is far more difficult.

There is no doubt that investors who entrusted Madoff with their life savings should be entitled to get them back. I only wish it were that open and shut.

There is a lot we don't yet know, but here's the way it looks to me at present.

Investors who relied on hedge funds ("funds of funds") may have a shot a recovery. These funds represented that they had the ability to select and monitor fund managers. Their recommendation of Madoff to their clients will be difficult to defend given the numerous red flags that have surfaced about his secretive and conflicted operation.

Investors who relied on other referral sources (brokerage firms, accountants, lawyers, advisors) stand on similar footing. These sources of referral may well have liability for not doing more due diligence before recommending Madoff's firm.