The hero in TAKEDOWN mentions the failure of the SEC and the regulatory capture of that agency.
Spitzer speaks as former NY attorney general in an excellent two-minute interview here. Watch what he says about SEC.
The reason he didn't know about Madoff was that Markopolous (the whistle blower) wasn't sending his data to the NY AG. Markopolous (who has a great book about his role in the Madoff case) was trying to work with the Feds.