The Netflix series acknowledges that the SEC was complicit in Madoff’s scam and that he could have been caught if one investigator assigned to the case had done about 30 minutes of checking. But then it also blames deregulation and free market capitalism for making the fraud possible. The first episode sets the stage with a speech by Ronald Reagan. …

“Resources that had been in New York City, on Wall Street’s doorstep, devoted to white-collar crime, to fraud, were being steered away [from Wall Street],” says Henriques of the George W. Bush administration era during which Madoff’s operation reached its peak. “For the SEC, this was an exacerbation of an existing problem, as a result of a deregulatory campaign that began with the election of Ronald Reagan in 1980.”

And yet, nothing in the series leads the viewer to the conclusion that the SEC needed a bigger budget to catch Madoff. In fact, outsiders were sounding the alarm without access to government funding or regulatory muscle.

[I also watched this documentary on Netflix and had the exact same reaction. To be fair, the film argues that it wasn’t just a lack of funding but also a desire to use a laissez-faire approach to Wall Street in the Reagan years that led to the debacle and carried over into the Bush 41, Clinton, and Bush 43 years. It’s an arguable point, but it’s not terribly compelling. And as Weissmuller points out, the clear takeaway from this series is that the regulators themselves ended up perpetuating Madoff’s fraud by doing only cursory checks even when they saw violations, essentially building Madoff’s reputation even more. Regulators in this period got continuous tips about Madoff’s suspicious claims, too. They had the authority and they had the opportunity. They just bungled it. — Ed]