Harry Markopolos, a former financial executive, testifies before a House
Financial Services Subcommittee on 'Assessing the Madoff Ponzi Scheme
and Regulatory Failures' in Washington February 4, 2009.
(Jason Reed/Reuters)
Posted on 02/04/2009 10:15:36 AM PST by NormsRevenge
WASHINGTON (Reuters) – Harry Markopolos, a former investment manager who warned U.S. regulators about Bernard Madoff, criticized the Securities and Exchange Commission and said on Wednesday that Madoff had help in running his alleged $50 billion fraud.
Markopolos told Congress that the SEC staff was neither willing nor able to uncover what Madoff, accused of having run the world's biggest Ponzi scheme, was really doing. He also said that he knows the names of a dozen other so-called feeder funds that helped Madoff raise money from pension funds and wealthy investors and that he would turn these over to regulators this week.
Calling SEC staff "too slow, too young and too undereducated," Markopolos said regulators "did not understand the red flags and could not do the math."
"They looked at the size of Madoff and said he's a big firm and we don't attack big firms," Markopolos said about U.S. regulators.
Madoff, a former chairman of the Nasdaq stock market, has been accused of running a massive Ponzi scheme in which he paid of earlier investors with money from later investors.
The failure of the SEC to detect the massive scandal was examined at a U.S. House Financial Services subcommittee hearing on Wednesday. ...
At the hearing, Markopolos described his probe of Madoff and attempts to share information with SEC officials. As early as May 2000, Markopolos said, he provided the SEC's Boston office with evidence that he said should have triggered an agency investigation of Madoff.
Over the subsequent years, Markopolos said he resubmitted the evidence to the agency, but to no avail.
"I gift-wrapped and delivered the largest Ponzi scheme to them," said Markopolos, who is now working as a fraud examiner.
...
"There are no incentives for the SEC to find fraud," he said.
(Excerpt) Read more at news.yahoo.com ...
Harry Markopolos, a former financial executive, testifies before a House
Financial Services Subcommittee on 'Assessing the Madoff Ponzi Scheme
and Regulatory Failures' in Washington February 4, 2009.
(Jason Reed/Reuters)
I’m sure heads will roll. Not.
I’ve heard it described that the original “Seeder” investors have more than recovered their stakes over the years. Why not drag those fellows into the investigation for complicity?
Marko.........Polos
| As early as May 2000, Markopolos said, he provided the SEC's Boston office with evidence that he said should have triggered an agency investigation of Madoff.
|
Wouldn't put it past the Boston SEC to have ignored this guy because of his looks... no kidding... Boston folks are very superficial especially the pompous ass types like Kerry...
Well, for the entire period of the Bush Admin. Markopolos tried to get the SEC to do something about Madoff, and they refused the entire time, even though he practically drew them a picture.
This is a colossal failure of historic proportions. Incompetence or corruption are the only two possible explanations, and incompetence alone seems insufficient.
The SEC as a separate agency is history.
Not so. The Boston office listened and studied what he submitted and concluded there was fraud, but could not proceed because the New York office had jurisdiction. They referred him to the NY office, but the NY office ignored it. The NY and Boston offices did not get along, and the NY office ignored the obvious for lo these many years.
“House Financial Services Committee Chairman
Barney Frank D)Mass. said.......”
Have you had enough yet?
Or do you need more?
March 29, 2004 - The Securities and Exchange Commission announced today the selection of Walter G. Ricciardi as District Administrator of the Commission’s Boston District Office.
Chairman William H. Donaldson
Stephen M. Cutler, Director of the Division of Enforcement
the Boston office initiated the investigation but the New York office reportedly was responsible for pursuing it
A wrinkle in the case is the complaint dating back nine years to the SEC by a securities industry executive named Harry Markopolos. He contacted the agency’s Boston office in May 1999, telling SEC staff they should investigate Madoff because it was impossible for the kind of profit he was making to have been gained legally.
The SEC’s Boston office has been accused in the past of brushing off a whistleblower’s legitimate complaints, in a case that brought the resignation of the head of that unit in 2003.
Bernie's brother, Peter Madoff and his daughter, Shana both attended Fordham Law School. So did Meaghan Cheung, one of the SEC investigators of Harry Markopolos' November 2005 complaint. Cheung and her superior Doria Bachenheimer, who signed off on the case, both have left SEC for personal reasons since September of last year, just a few months before Bernard Madoff confessed and was arrested.
Among other things, Peter Madoff was a Chief Compliance Officer at his brother Bernie's firm. Peter was also a director of several securities associations and exchanges. Peter's daughter Shana, was Bernie' firm's compliance officer.
Here's Peter Madoff's house.
As the No. 2 executive at Bernard L. Madoff Investment Securities LLC, Peter Madoff worked side by side with his older brother Bernard for nearly 40 years. Peter was viewed as Bernie's heir apparent so the brothers tried to avoid flying together when they went on skiing trips together. Now, they are keeping their distance. Peter has stopped coming into the office and isn't talking publicly about his role at the securities firm, where he headed trading operations.
Peter's daughter also joined the family business. She worked primarily as a "compliance lawyer" at Madoff Securities' market-making arm at the time of her uncle's arrest.
Interesting that you say that.
Every person I've every met from Boston has been a flaming a**hole.
Boston businessmen are whining wimps, and the woman drag their knuckles when they walk.
Almost forgot -- with all due respect.
Mr. Markopolos said he and his team were worried for their safety because of Mr. Madoff's powerful position and status .... that led them to submit some documents anonymously.
VERY instructive is Madoff "investors" whining that they have been screwed-over.......yet they made a lot of money over the years.......and took out a heckava lot more than they put in. Clearly, some of the "pigeons" were in on the scam.
Some investors gave Madoff AN ASTOUNDING $100-500 million to "invest" for years and years. Some investors even wrote PERSONAL checks to Madoff's subrosa spinoff vehicle that was not listed on the Securities Exchange (tax evasion modus?).
NOT EVEN ONE INVESTOR blew the whistle on Madoff.....all accusations of fraud were made by objective analysts outside the scam operation. And when fraud raised it's ugly head, Madoff and his investors scared off accusers. As Laura Goldman wrote---whistle-blowers were accused of being anti-Semitic---a very scary charge.
The now-famous 2005 Markopolis Report to the SEC raised fraud issues and yet the SEC "turned a blind eye."
It must be considered that the SEC backed-off investigating Madoff NOT because they are incompetent, but because SEC investigators risked losing their jobs if they zeroed in on Madoff. CAREER KILLER In the ranks of L/E, it is NOT advisable to imply people of Jewish heritage are doing something illegal---even moreso, it is a career killer to suggest it. FBI agents have been lacerated and condemned----even losing their jobs.
Madoff seemed to know L/E dared not suggest he was doing something illegal, and he may have colluded to use scary charges of anti-Semitism to forestall investigations into his operation.
Madoff had a lot to lose if he was investigated. He knew he was operating a fraud----a fraud that subsidized his lavish lifestyle; posh homes all over the world, several yachts, private planes, country club memberships, and purchases that included pricey watches and jewelry.
The big question is WHICH pigeons. To be honest, we may never know. Probably they invested through offshore feeders, under fake names or shell entities with faked-named owners/principals, made (and/or laundered) a boatload of money, and won't be coming forward to complain.
But Bush had far longer to do something, when you consider when the first warnings cropped up.
The Bush SEC, like the Clinton SEC, was asleep at the wheel.
Personally I think it's because the SEC is a training ground for Wall Street (finance firms and law firms). Nobody in their right [sic] mind wants to jeopardize a mid-six figure salary by getting a reputation as being an aggressive regulator.
The SEC is a sham. It is worthy only of our abject disgust. I'd like to see an aggressive CRIMINAL prosecutor go through the staff and see what floats to the surface.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
Bush's fault that Clinton did nothing.