1. FINRA, an outgrowth of the NASD, is a very profesional organization, taking on the heavy detailed regulatory work away from the SEC, wherein they monitor to the nth degree, particularly broker dealers & individuals of same. They are tough, like the NFA [National Futures Assoc.] is for futures.

2. The fact that FINRA missed Madoff was, IMHO, largely because he was one of them, as was his brother, in terms of setting FINRA policy & regs, at times, and by way of good reputation.

3. The suspect portion of FINRA’s lack of a Madoff investigation, and SEC nonfeasence, is whether the Madoff operation was sanctioned by Executive Order 12333 (1981) of President Reagan, wherein the US intelligence services were authorized to operate what became known as Title 18, Section 6 USG corporations for intelligence purposes, and to deny any intelligence community connection.
http://www.tscm.com/EO12333.html
http://en.wikipedia.org/wiki/Executive_Order_12333

Hence, there need NEVER be any revelation of what Madoff, just “a cog in the corrupt financial wheel,” was up to, e.g., criminal money laundering, black ops financing, intelligence gathering, under the cover of “National Security … need to know, compartmentalized.” Unless someone inside leaks the info — under penalty of up to death due to Treason — there’s no way to confirm same.

The fact that so many Madoff investors lost money in one swoop was just unintended blowback from, IMHO, the upwards of $14 trillion in sovereign funds placed into ‘lockdown’ between 10th and 12th September 2008, that were not usable by the USA or its banks due to USA policy decisions, USA Basil III intransigence, and refusal by the USA to honor its “Settlement” payables worldwide, in the $trillions, which all would have, by happenstance, continue to finance Madoff’s operation. Such lockdown was way beyond FINRA, the SEC, the U.S. Treasury, the Dept. of the Justice, and the POTUS.