The US Securities and Exchange Commission (SEC) ignored warnings about the activities of Sir Allen Stanford as long as ago as 2004, it has been claimed.
Speaking to a US Senate Panel, Leyla Wydler, a former employee of Sir Allen, stated that she was sacked because of her refusal to sell certificates of deposit (CDs).
According to Ms Wydler, a number of her co-workers were also dismissed because they ignored management pressure to push CDs on customers and suggested they invest in stock and bonds.
She claimed that she went to the SEC in 2004 with her concerns but the issue was never investigated.
People who lost money in the alleged $7 billion (£4.26 billion) Ponzi scheme had already blamed the SEC for not acting fast enough. Sir Allen, however, denies he has done anything wrong.
The SEC also came under fire for its handling of Bernard Madoff's fraud.
Madoff is currently serving a 150-year jail sentence.
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