Report: SEC employees disciplined for Madoff miss

The punishments add another chapter to one of the biggest blows to the SEC's reputation, one that has placed the agency under consistent criticism from members of Congress. That failure of oversight also has been used to help justify arguments from those same critics that the agency's budget should not be expanded, even as it has been given more responsibilities as part of the Dodd-Frank financial reform law. 

SEC Chairman Mary Schapiro, who took over the agency after Madoff confessed, has had to repeatedly defend the SEC's work to skeptical lawmakers.

The agency never caught Madoff in the massive scam, only finding out about it when Madoff and his sons turned over the scheme during the 2008 financial crisis.

The SEC suffered further indignity on the matter after an independent investigator named Harry Markopolos wrote a book detailing his failed efforts to get the SEC to look into Madoff's operations years before the scam came to light.