He did so at the insistence of SEC regulators, after they had bungled yet another investigation of tips that Madoff was dishonest. (You can find details of that and other failed SEC investigations of Madoff in The Wizard of Lies, my book on his historic Ponzi scheme.) Unable to find any sign of fraud, regulators concluded that Madoff was merely operating as a money-manager without having registered.

FORBES: Madoff's Lament: I Was An Honest Money Manager Once