The SEC Inspector General’s full report on the Madoff debacle was released late Friday afternoon. No doubt, it was timed to minimize publicity. The fact is however, that while the report adds hundreds of pages of detail, the story is well known: the SEC had repeated chances beginning as early as 1992 to discover and halt the Madoff fraud and failed.

The detail offered by the full report, amplifying the lengthy summary released earlier in the week, makes it painfully clear that the Madoff failures are not attributable to any one person or tied to a single explanation. The failures stem from actions such as supervisors signing off on closing investigations where the basic investigative work had not been done; frontline investigators failing to obtain and analyze the basic documents; in some instances, the inexperience of investigators; in others, a lack of resources; and sometimes supervisors incorrectly focusing an inquiry on one pre-determined possible malfeasance such as front running, rather than simply following the evidence to determine what if anything was wrong.

The common thread through this long, detailed tale of woe is a simple failure to investigate: get the records; analyze the transactions; take the testimony; and determine what happened. The repeated gaffes, perhaps premised on a misguided supposition that a long standing and well-known Wall Street player such as Mr. Madoff is honest, start at the top and flow through the entire operation.

The Chairman’s comments appropriately focus on the future, promising that the lessons of the Madoff debacle will be learned as enforcement is rejuvenated and moves forward. The Chairman’s response offers a vision of a brighter future for the SEC and the investors and markets the agency is supposed to protect. Fulfilling the Chairman’s promise is critical if the Commission is going to implement its congressional mandate to protect investors and the markets. In short, the agency must once again become the top cop of Wall Street.

A glimpse of whether the promise of better days will be fulfilled can be seen in coming weeks as four high profile cases move forward:

SEC v. Mozilo, discussed here, is an enforcement action against the officers of sub-prime lending giant Countrywide. It is the most prominent action brought to date from the dozens of market crisis investigations that have been underway for months. The complaint alleges fraud keyed largely to alleged failures to disclose loan risks and related matters in public statements and filings and insider trading. Motions to dismiss have been filed claiming the SEC’s complaint defective in part because it omits critical facts and material. Rulings should come later this year.

SEC v. Rorech, discussed here, is the first insider trading case based on credit default swaps. The complaint claims the case is squarely within the SEC’s limited authority in this area. Many have questioned that claim since the complaint was filed. There should be rulings later this year.

SEC v. General Electric, discussed here, is a settled financial fraud case. The complaint alleges that over a period of years various individuals at different levels of the company cooked the books to make guidance. The action named only the company and settled with an injunction and a fine. The Commission’s release announcing the case and settlement states the investigation is over as to the company, but does not mention the individuals involved. The SEC cannot at this juncture require that the company take remedial steps to improve its internal procedures to prevent a reoccurrence of the wrongful conduct. It is unclear if the Commission intends to pursue the individuals alleged to have engaged in wrongful conduct in the complaint.

SEC v. Bank of America, discussed here, is based on the financial institution’s acquisition of Merrill Lynch. The complaint claims the shareholders were misled when asked to approve the deal since the proxy materials suggested that Merrill executives would not be paid bonuses. In fact, a schedule was omitted from the merger agreement attached to the proxies which stated that up to $5.8 billion in bonus payments had been authorized by the bank and the broker. The SEC and the bank tried to settle the action with a consent injunction and a fine. The Court, to date, has declined to accept the deal, asking for additional explanations. With Bank of America now claiming that it did nothing wrong and the Court all but rejecting the SEC’s contention that it could not determine what happened because of privilege assertions, the case seems to be at a an impasse. Another round of briefs has been ordered by the Court.

While the enforcement program is still in transition, these cases should provide an early test of Chairman Shapiro’s promise. Each of these cases was authorized this year. Each is a high profile action important to the Commission’s enforcement efforts: Mozilo because Countrywide is the poster child for the sub-prime crisis; Rorech because CDS have figured so prominently in the current market crisis; General Electric because the SEC has been dogged with a reputation that it is reluctant to take on the big companies and has alleged that various individuals were involved; and Bank of America because of the executive bonus issue and the use of corporate fines. Each case also raises questions about the quality of the allegations in the SEC’s complaints.

The federal securities laws were passed to bring a new ethics to the marketplace, largely by providing sunlight through full disclosure. The enforcement program, as an implementing instrument of those laws, must be guided by the fundamental vision of the statutes in the day to day hard work of sifting facts, documents and testimony during investigations. In the days and weeks to come as these four cases and others unfold it will become clear if the rejuvenated enforcement program has adhered to the guiding principle of the statutes and found the mark.