There were several red flags that were ignored or overlooked: - Consistent High Returns: Madoff's investments showed remarkably consistent returns, which is unusual even for the most successful investors. - Lack of Transparency: Madoff was notoriously secretive about his investment strategy and operations. - Unusual Business Practices: His firm operated as both an investment advisor and broker-dealer, which is uncommon and could lead to conflicts of interest. - Avoidance of Due Diligence: Many institutional investors did not perform adequate due diligence, relying instead on Madoff's reputation.