There is voluminous commentary on the origins of the global financial crisis (GFC), international attempts to limit the contagion and the Herculean effort to stop the global economy sliding into a depression. However, in the fast-moving world of the GFC, the debate shifted to the search for answers to the most challenging question: can we stop this from occurring again? To date, a number of responses have been formulated, including the need for a more holistic approach to regulating the global financial system, more stringent controls on banks and new financial products and reform of executive remuneration practices that encourage excessive risk-taking. This article suggests that an additional issue in the reform debate warrants consideration. The adequacy and implementation of fraud-detection systems in the financial services industry must be addressed. The monthly returns from the largest feeder fund in the US$65 billion Ponzi scheme overseen by Bernard L Madoff are analysed to demonstrate how the performance characteristics of investment schemes can be used as a potential ʻred flagʼ indicator in a broad system of fraud detection. It is argued that performance characteristic analysis is likely to play an important role as one tool within a collection of quantitative and qualitative assessment controls able to identify fraud perpetration in the financial services industry.