According to the documents Harry Markopolos filed with the SEC in 2005, more than a few investment bankers were suspicious of Madoff – but said nothing.
[several] were in contact with Markopolos, who claimed that each would give evidence to the SEC so long as they were never required to speak in an official capacity. If they had spoken up in 2005 many believe Madoff could have been stopped before most of the damage was done.
What should they have done? Gone public? They had suspicions, not proof. Remember, Madoff was a powerful, hugely respected figure then. Challenge him and lose, your career could vaporize.
And of course, the SEC had the documents and did nothing with them.