WASHINGTON - Before his downfall in an alleged fraud that may end up costing investors $50 billion, Wall Street money manager Bernard L. Madoff circulated a promotional message extolling his service to clients.

"Customers know that Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing and high ethical standards that has always been the firm's hallmark," Madoff proclaimed in a brochure designed to drum up more business.

The brochure offers a glimpse of why the Securities and Exchange Commission was unable to stop Madoff in his tracks despite repeated warnings.

As financial markets have grown increasingly complicated - which was the case with this part of Madoff's operation - the SEC has struggled to keep up with the changes.

The circumstance of this relatively tiny bureaucracy - 3,567 employees including clerical workers - is that of an agency overwhelmed.

"It's not a 21st-century institution; they're all living on their past glory, which was great, but it's gone," said Isaac Hunt, an agency commissioner from 1996 to 2002.

One small slice of the SEC's responsibilities is to regulate the industry's 10,800 financial advisers, one of whom was Madoff. The agency was warned several times of possible fraud going on at Madoff's operation - including a series of e-mails from a Massachusetts whistleblower that now seem quite prophetic - but nothing happened.

This is not at all surprising to those who have worked at the SEC, where information overload is a fact of life.

"You get hundreds and hundreds of letters and e-mails; there's no guarantee the SEC is going to catch" any given wrongdoer, said former commissioner Laura Unger.