NEW YORK (

TheStreet

) -- The Senate Banking Committee is holding a hearing Wednesday to look into the

Securities and Exchange Commission

's investigation of an alleged $8 billion Ponzi scheme led by Allen Stanford.

Though the SEC "found strong evidence" Stanford was likely operating a Ponzi scheme as early as 1997, the SEC did not bring charges against Stanford until 2009," said Senate Banking Chairman Chris Dodd (D., Conn.). Dodd called the SEC's lapse, documented in a March 31 report by its internal watchdog, "deeply troubling," comparing it to the Commission's now-notorious failure to investigate the $65 billion Ponzi scheme by Bernard Madoff.

SEC inspector general David Kotz, author of the March 31 report, and three other SEC officials are scheduled to testify.

In prepared testimony, the SEC officials, including enforcement chief Robert Khuzami, Carlo di Florio, head of the Office of Compliance Inspections and Examinations and Rose Romero, director of the Forth Worth regional office, all said they "regret that the SEC failed to act more quickly," and are implementing reforms suggested by the Inspector General.

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Written by Dan Freed in New York

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