Based on the information provided, it seems SIPC's oversight of the Madoff Ponzi scheme was insufficient in several key ways:
1. SIPC failed to detect Madoff was operating a Ponzi scheme for decades, despite numerous red flags and warnings from experts. This indicates SIPC did not adequately scrutinize or audit Madoff's operations.
2. Even if Madoff had never purchased the securities he claimed to, SIPC's rules at the time would have still considered his customers' accounts "fully protected" since their statements showed holdings. This suggests SIPC's rules did not properly account for the risk of fraudulent statements.
3. When Madoff's fraud was revealed, many victims were not fully compensated
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