While there has been outrage over the Madoff scandal, so far there are questions but few answers on how the financier was able to evade detection by regulators in the face of numerous examinations and allegations. The House Financial Services Committee will hold an open hearing today to discuss Bernard Madoff’s alleged $50 billion securities fraud. The session titled, "Assessing the Madoff Ponzi (Scheme) and the Need for Regulatory Reform,” is scheduled for 2:00 pm EST.

On Friday, Reuters reported that Rep. Paul Kanjorski, a Pennsylvania Democrat, who is chairman of the House Financial Services subcommittee on capital markets, is mulling over the idea of asking Madoff to testify on how they evaded detection by U.S. financial regulators.

"I think this will allow us to examine how it happened. There are obviously voids in the regulatory process," stated Rep. Paul Kanjorski, a Pennsylvania Democrat and chairman of the House Financial Services subcommittee on capital markets, in the Reuters story.

David Kotz, inspector General of the Securities and Exchange Commission, is expected to testify, according to media reports. Kotz is heading up the SEC’s internal investigation on the case. At a time when Congress is contemplating an overhaul of the U.S. financial regulatory system, one hot topic at the hearing will be the failure of regulators to detect the massive fraud, which spanned the globe and affected charities, fund of funds and possibly thousands of individual investors.

Today’s Wall Street Journal is reporting that Madoff’s market making and brokerage firm, Bernard L. Madoff Investment Securities LLC, was examined at least eight times over a period of 16 years by the SEC and other regulators. The article, “Madoff Chasers Dug for Years, to No Avail,” (subscription required) details a litany of allegations and suspicions. Despite investigations into violations of trading rules, allegations of front-running customers, misleading the agency on his investment strategy, not registering his investment advisory business with the SEC, and its feeder fund Fairfield Greenwich Group failing to disclose that Madoff was the investment advisor to its clients, fraud was not detected.

To watch a live Webcast of the Congressional hearing on Madoff,
click here.