Posted on 02/05/2009 5:59:53 AM PST by Liz
SAYS SEC 'ROARS LIKE A LION, BITES LIKE A FLEA' Harry Markopolos told Congress the SEC failed to act despite credible allegations of fraud for nearly a decade. Markopolos, a securities industry executive and fraud investigator, blew the whistle on Madoff between 2000 and 2008.... "I became fearful for the safety of my family. Madoff was one of the most powerful men on Wall Street and in a position to easily end our careers or worse," Markopolos said.
(Excerpt) Read more at nypost.com ...
EVEN MORE 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 "Madoffian 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 investment broker Laura Goldman wrote---whistle-blowers were accused of being anti-Semitic---a very scary charge.
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, exclusive country club memberships, and purchases that included pricey watches and jewelry.
I realize Madoff is guilty as sin, but this Markopolos was a whiney, self-serving, jealous opportunist. His testimony has ulterior motives.
‘I realize Madoff is guilty as sin, but this Markopolos was a whiney, self-serving, jealous opportunist. His testimony has ulterior motives.’
I have to admit, I’ve been wondering about HIS STORY for the past 24 hours or so myself. Something just doesn’t ‘feel right’ in my gut related to him.
Maybe its just me....but we’ll see shortly. You can’t do what he’s done this week without ‘blowback’.
Why is it a story like this doesn’t lead to the dissolution of the SEC? Instead they call for more funding.
If a store sold you rotten fruit or a product that doesn’t work you wouldn’t clamor to spend more on it.
Yes sir ... about as scary as calling the little zer0 a half black, or a socialist/commie, or mentioning his middle name Hussein, or disagreeing with his socialist/commie policies, ...
I, for one, shall dance at his removal party.
Markopolis isn’t too smart, calling ou the SEC like this. He’ll probably be behind bars before Madoff.
The government is like that Far Side cartoon, where a brick is thrown through the window, and the brick has a note attached, saying, “Windows broken? Call ACME Window Repair.”
Really? Please elaborate.
Madoff is a convenient lightening rod for public angst at Wall Street & the SEC. MSM can’t point the finger for the real cause of the mortgage meltdown without making Barney, Dodd, and Schummer the lightening rods. MSM has an alternative for the publically demanded news.
‘Madoff is a convenient lightening rod for public angst at Wall Street & the SEC. MSM can’t point the finger for the real cause of the mortgage meltdown without making Barney, Dodd, and Schummer the lightening rods. MSM has an alternative for the publically demanded news.’
Full agreement. Its staggering how much damange Barney Frank and Chris Dodd have caused, and yet they are taking no heat at all, except from O’Reilly.
Even though Madoff's investors were savvy, smart successful businessmen accustomed to constructing and analyzing complicated financial reports, NOT ONE INVESTOR blew the whistle on Madoff-----even as they were receivng Madoff's amateurish reports.
FOR YOUR REFERENCE BY Ronald D. Orol, MarketWatch reporter based in Washington.
EXCERPT There were several things that alerted some in the hedge-fund industry that an investment with Madoff may not have been as safe as it initially appeared.
Aksia LLC, which researches hedge funds and advises institutions about investing in the industry, said that it never recommended that clients put money in some of the "feeder funds" that allocated their capital to Madoff. On the surface, these feeder funds looked like institutional-quality vehicles, but there were "a host of red flags," Aksia Chief Executive Jim Vos and colleague Jake Walthour wrote in a letter to clients after the Madoff scandal erupted last week.
The funds were marketed as using a "split-strike conversion" investment strategy that is "remarkably" simple, but the returns it purportedly generated could not be replicated by Aksia's quantitative analyst, Vos and Walthour wrote.
The Madoff funds supposedly traded in the Standard & Poor's 100 index options market, but that market is relatively small and may not have been able to handle trading by vehicles with roughly $13 billion in assets, they said. The feeder funds had almost all their assets custodied with Madoff Securities, the brokerage unit of Madoff's firm.
Aksia checked into the auditor of Madoff Securities and discovered it was a firm called Friehling & Horowitz, which had three employees -- one of whom was 78 years old and another was a secretary. The firm's office in upstate New York was 13 feet by 18 feet.
Madoff's Web site claimed the firm was technologically-advanced, but it sent paper confirmations of trades via US mail at the end of each day, rather than providing electronic access to this important information.
Paper copies provide a hedge-fund manager with the end-of-the-day ability to manufacture trade tickets that confirm the investment results.
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, exclusive country club memberships, and purchases that included pricey watches and jewelry.
What sort of man trades his honor for trinkets? The venality is astounding.
When this story broke, I went and had a quick look at the depth of the OEX option chains and knew, just as Markopolos did, that something was fishy. OBVIOUSLY fishy. The market in OEX options, and options on OEX components, was not deep enough for what Madoff was claiming to do. A billion? Sure.
$20 billion? I don’t think so.
I agree with you more and more: I think there’s a bunch of money off-shore. I think a bunch of money has been routed in/out of Madoff’s funds through charities and off-shore funds.
And I think that Markopolos was smart to be very quiet about his concerns. We now see all these people claiming that Markopolos should “have put it out there on a blog...”
Yea, right. There’s a reason why so many of these twink journalists are scribblers, and not managing money.
Look at what the SEC did to Einhorn, BTW. Einhorn DID make his allegations public. Einhorn DID back up his public assertions with documentation, accounting, and mathematics.
What did he get for it? The SEC investigated Einhorn.
The performance of the SEC during the Bush administration is something that Republicans will have to live down for years.
HE DID.
Because Spitzer is a) Jewish, b) connected, c) a hedge fund investor in other funds, Markopolos assumed (correctly, it now turns out) that Spitzer was invested with Madoff.
Markopolos made copies of all his documentation, handled it with only gloves and left the information for Spitzer at a place Markopolos knew Spitzer would get it. Nothing happened.
Agreed. To me it is the Number One failing of the Bush Administration.
He couldn't get past the hookers.
OK, side-question for ya Liz:
Harry mentioned that there are 12 other European funds out there, “laying low in the weeds” — that he has not disclosed as Madoff feeders to date. He says that he’s going to give the information to the French and Swiss authorities presently.
Just how high/wide do you think the tax evasion scandals in the EU are going to blow as a result of this? Markopolos’ prepared testimony laid out how Madoff dropped the Jewish affinity angle when dialing for dollars in the EU — instead, he went after royalty and the elite “betters” in Europe.... ie, the same class of people found by Germany to have secret accounts in Lichtenstein, etc.
Add me to the list of people who had trouble with his testimony. I actually could see how the SEC would want to tune him out. He is at once annoying, ranting, histrionic, self-important, undiplomatic and polemic. They say you catch more flies with honey than vinegar. No wonder he couldn’t cajole the SEC to look more closely at Madoff. They probably found the Madoff staff much more professional, gracious, engaging, even keeled...
And the fact that Madoff had moles in the SEC probably didn't help matters.
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