Psychology in the news: Why the SEC never busted Madoff

It seems that Bernie Madoff was investigated five times by the SEC. They even found him contradicting himself and yet didn't follow up.

I'm guessing that this is because the esteem Madoff enjoyed on Wall Street. He was a personage there, a big philanthropist and wildly successful guy who knew everyone and had chaired NASDAQ. People were all but begging to be allowed to invest with him. He was the granddaddy, the godfather. If someone is that trusted and respected, suspecting them of something as base as Ponzi scheming is nearly unthinkable. You figure you must have misunderstood.

This reminds me of the Milgram experiments, in which unwitting subjects administered what they thought were lethal shocks to other people because a white-coated authority figure had told them to do so. When faced with authority, people tend not to rebel. Perhaps we should screen government investigators to find the few who continue to think independently in the face of authority.