It is interesting to think what might have happened had federal regulators acted 10 years ago against swindler Bernie Madoff.

Perhaps they could have stopped him before his Ponzi scheme became the biggest financial fraud in United States history and cost investors $18 billion.

The real scandal is that the U.S. Securities and Exchange Commission was warned — repeatedly and in detail — but did nothing.

Federal watchdogs failed to bark as a thief looted the American public for more than a decade.

That’s why it was encouraging to see the SEC receive a sharp rebuke in a different case Monday from a federal judge in New York.

Judge Jed Rakoff of the U.S. District Court in Manhattan ruled that a $285 million settlement between the SEC and Citigroup was “neither fair, nor reasonable, or adequate, nor in the public interest.”

The judge questioned the practice of the SEC accepting seemingly large fines from financial companies in exchange for allowing the company to “neither admit nor deny” the basic allegations.

This practice is akin to letting a bank robber pay a fine, serve no jail time and walk away without a criminal record.

The ruling throws a wrench into the method the SEC has used over the past 10 years to allow big banks to settle out of court without admitting guilt but promising not to deny it.

Rakoff called Citigroup a “a recidivist” offender which repeatedly promised to obey the law but then did not.

The judge also pointed out that the SEC has failed to enforce cease-and-desist agreements against securities companies for at least 10 years.

This is emblematic of the root problem at the SEC, the cozy relationship between regulators and the big financial firms they regulate.

Rakoff said it was wrong and dangerous for a “court to employ power and assert its authority when it does not know the facts.”

That may seem obvious to most Americans. If a crime is alleged, the public should ultimately see the names of the perpetrators and the evidence against them.

The allegations against Citigroup are strikingly similar to those faced by most of the big Wall Street firms.

The company told investors an outside entity had assembled a billion-dollar package of safe, mortgage-backed securities. In fact, Citigroup had put together a package of risky loans and then bet the fund would lose money.

And did it ever. Investors lost $700 million, while Citigroup raked in $160 million in profit.

The proposed SEC settlement again showed regulators bending over backward to help corporate criminals.

The big banks prefer these settlements because no facts are assembled that can later be used by investors in civil litigation.

The government gets its $250 million and the bankers get to walk away from their crimes. Meanwhile, investors and the public learn nothing.

In 2009, Harry Markopolos, the financial analyst who repeatedly warned the SEC about the Madoff scandal, told Congress that our government has too often “coddled, accepted and ignored” white-collar criminals who “steal our pensions, bankrupt our companies and destroy thousands of jobs, ruining countless lives.”

Which, when you think about it, is a pretty good summary of the financial disaster that has crippled the U.S. economy for the past three years.

Let’s hope Judge Rakoff’s ruling sets a higher standard of transparency and accountability.

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The opinions expressed in this column reflect the views of the ownership and editorial board.