As more and more red-faced investors raise their hands to admit exposure to Bernard Madoff’s Ponzi scheme, the Securities and Exchange Commission is feeling equally embarrassed after a two-year-old report addressed to the organisation has emerged. Its title: The world’s largest hedge fund is a fraud.

The Economist reported that the author of the paper was Harry Markopolos, a self-described derivatives expert with experience running the split-strike conversion strategies that Madoff credited for his returns. In his report, Markopolos raises 26 “red flags” that he says are evidence that Madoff Securities is either, in an unlikely scenario, paying investors by front-running customer order flow, or, in a highly likely scenario, the “world’s largest Ponzi Scheme”.

Read the full report here: