They did this by coming to a "settlement" with Bernie Maddoff that allows him to neither admit nor deny wrongdoing, and bars him from working in the industry in the future. (As if he is going to deal in FINANCIAL "securities" where he's at. (The other kind, maybe.) This is a convicted felon, mind you, whose felony conviction represents more than enough evidence in and of itself to prevail in a civil proceeding. They should impose the stiffest sanction available on this man. The regular law has.
Now the SEC's incompetence in persuing Madoff after a whisteblower had given them enough evidence for "probable cause" comes into clearer focus. It is apparently incapable of forensic accounting, or any type of serious investigation into the substance of tranasctions. (And the SEC tends to persecute whisteblowers, like David Einhorn, that embarass it by doing a better job.) About all they're capable of is running a "check the box" inquiry. Avoid "technical" violations of the law (and the resulting "check" marks) and you're fine.
The message that has been sent is that NO ONE (with the possible exception of David Einhorn) needs to fear the SEC. That is true even for "murder" (Madoff's scheme caused several suicides.) If they can't nail a suspect even when the evidence of wrongdoing has been handed to them, who can they nail? And if they can't bring to fruition a case that a whistleblower has mostly "prepped" for them, what kind of case can they bring to fruition?