Victims of Bernard Madoff's investment fraud have lost their bid to sue the U.S. Securities and Exchange Commission for negligence in failing to uncover the swindler's Ponzi scheme, Reuters reported yesterday. A federal appeals court in New York yesterday upheld the dismissal of lawsuits against the U.S. securities regulator brought by Madoff investors. The court said that the SEC's actions and "regrettable inaction" were protected by a law that shields federal agencies from liability. The Madoff case embarrassed the SEC, which had investigated the now-imprisoned money manager but failed to detect his fraud. The investor lawsuits relied heavily on a 2009 report by the SEC Inspector General's office, which outlined how the agency missed red flags and failed to follow up properly on leads that he was running a massive scam at his firm, Bernard L. Madoff Investment Securities LLC.
