2/4/09

CNN: Markopolos Knew in 5 Minutes that Madoff Ran a Ponzi Scheme

Just one look, that's all it took... a smart amateur.

Something sure is rotten... in the state of the SEC.
Madoff whistleblower blasts SEC
A fraud investigator told Congress that he'd warned the agency about Madoff's Ponzi scheme years ago. But his efforts went nowhere.
By Allan Chernoff, Sr. Correspondent, CNN

NEW YORK (CNN) -- A whistleblower who repeatedly warned the Securities and Exchange Commission that Bernard Madoff was perpetrating a massive investment fraud testified Wednesday that the regulatory agency that oversees financial markets is inept, "financially illiterate" and far too cozy with the financial titans it is supposed to be regulating.

"The SEC is also captive to the industry it regulates and it is afraid of bringing big cases against the largest most powerful firms," said Harry Markopolos, an independent financial fraud investigator. "Cleary the SEC was afraid of Mr. Madoff."

Markopolos began contacting the SEC at the beginning of the decade to warn that Madoff was a fraud. He sent detailed memos, listing dozens of red flags, laying out a road map of instructions for SEC investigators to follow, even listing contacts and phone numbers of Wall Street experts whom he said would confirm his findings. But, Markopolos' whistle-blowing effort got nowhere.

"I gift wrapped and delivered the largest Ponzi scheme in history to them and some how they couldn't be bothered to conduct a thorough and proper investigation because they were too busy on matters of higher priority," Markopolos told the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.

Agency squabbles

After at first receiving an encouraging reception from the SEC's Boston Bureau Chief, Edward Manion, Markopolos said the New York SEC office, which supervised Boston, blocked a further investigation.

"In 2000 Mr. Manion warned me that relations between the New York and Boston regional offices was about as warm and friendly as the Yankees-Red Sox rivalry and that New York does not like to receive tips from Boston," Markopolos testified.

Markopolos said it took him five minutes to conclude that Madoff was a fraud after looking at his reported investment performance, and four hours of actual number-crunching analysis to confirm his suspicions....more...

1 comment:

Howard M. said...

Write to Congress expressing anger in regards to the SEC's handling of the Madoff Fraud:

Below are instructions in regards to a website that has been developed to generate letters to Congress; the site is user-friendly with sending letters to Congress; how to access ANY Senator & House Representative, including those that only use "webmail". Within the website, you have the option to be listed as a Madoff VICTIM, a RELATIVE of a Madoff Victim or a FRIEND of a Madoff Victim:

1) http://www.bernard-madoff-fraud-resources.com/
write_to_you_rep_madoff_fraud.php
2) You will find a drop-down menu at the above site for your respective State. All Senators and Congressional Representatives' email addresses that have been garnered are listed.
3) If your State"s Congressional reps are listed great; if not or if
for example only 1 Senator or no House Reps are listed then do the
following:
4) COPY the website's letter and then go to the following 2 sites to PASTE:
US SENATE http://www.senate.gov/general/contact_information/senators_cfm.cfm
US HOUSE https://writerep.house.gov/writerep/welcome.shtml
5) each of the above sites will lead you to your respective Senators & Congressional Reps; PASTE the letter into the respective Senator & House Reps "webmail" form; then SEND
6) Note that it's important to only send to Senators and Representative from your state; otherwise the Senator and Rep will view the letter as SPAM