it wasn't just markopolos. >> yes.i think it is clear that there were letters, and it is also clear that the sec did look at him. what is not clear is why the sec was unable to conclude that he was conducting the ponzi scheme we now know he was conducting. >> smith: in late 2005, madoff learned that sec investigators were about to interview fairfield's due diligence officer in that office in bermuda. ( phone rings ) madoff got on the phone. he began by saying, "this conversation never took place." in this 65-page transcript of a single conversation, madoff coached him on how to handle sec investigators. "you don't want them to think you're concerned about anything," he said. "you should be casual." madoff then instructed, "your position is to say, 'listen, madoff has been in business for 45 years. he executes a huge percentage of the industry's orders. he's a well-known broker. you know, we make the assumption that he's doing everything properly.'" finally,n january, 2006, prompted by markopolos, the sec launched an of