"If Ms. Schapiro seeks to learn from the SEC's recent history, she might start by considering the most basic lesson from the Madoff incident. Private market participants spotted the fraud, while SEC lawyers couldn't seem to grasp it. Rather than giving her staff lawyers still more automony, she should instead be supervising them more closely, while trying to harness the intelligence of the marketplace. Meantime, investors should remember that their own skepticism and diversified investing remain their best defenses against fraudsters", Editorial at the WSJ, 10 February 2009.
Yes, it would have been unusual. Which raises this equestion: why did Madoff have Freihling & Horowitz do its audit? Was it to give the Big 87654 plausible deniability as to each's knowledge of Madoff's fraud?