The SEC's Biggest Whistleblower Blunders (PHOTOS)

How did they not hear about this sooner? That's the question burned investors were asking the SEC in December 2008 when regulators charged Bernie Madoff with securities fraud for a multi-billion dollar Ponzi scheme he'd been running for decades.

Turns out the SEC did hear about it--more than six times. But when whistleblowers sounded off, the agency turned a deaf ear. A 2009 report released by the SEC Inspector General reveals that whistleblowers filed complaints involving Madoff as early as 1992. Over the next 16 years before Madoff confessed in 2008, the SEC received six "substantive complaints that raised significant red flags." But examiners never conducted a "thorough investigation" of Madoff's operations and they rejected additional evidence from whistleblowers like hedge-fund manager Harry Markopolous.

Markopolous is just one of a number of whistleblowers who in recent years has tried to alert the SEC of potential wrongdoing, only to be ignored or misunderstood.

And the number may be dwindling. Besides book-deals and obscure Person of the Year awards, tipsters have little incentive to come forward. The SEC's whistleblower "bounty" program hasn't offered much additional incentive. Since its creation in 1989, the little known program has made reward payments to only five claimants totaling $159,537.

A new report by the SEC Inspector General recommends that its whistleblower program be overhauled. In the meantime, wet your whistle on our list of the SEC's Biggest Whistleblower Blunders: