Madoff Tipster: 'Investigative Ineptitude' at SEC
A copy of accountant Harry Markopolos's written testimony today before the House Financial Services subcommittee
It took a little longer than expected but mild-mannered accountant Harry Markopolos broke his silence today on Capitol Hill. And he had a lot to say.
Markopolos, the now-famous whistleblower who for nine years tried unsuccessfully to get the Securities and Exchange Commission to investigate Bernard Madoff's New York investment firm, testified before members of the House Financial Services subcommittee (hearing info).
He blamed the SEC's "investigative ineptitude" and "financial illiteracy" for the continuation of Madoff's purported $50 billion Ponzi scheme, a fraud that had ensnared investors around the globe. For today's hearing, Markopolos produced a whopping 65 pages of written testimony that eviscerated the federal government's financial industry watchdog, calling the agency "nonfunctional" and a body that "roars like a lion and bites like a flea."
Markopolos also added that he became "fearful for the safety of my family until the SEC finally acknowledged, after Madoff had been arrested, that it had received credible evidence of Madoff's Ponzi scheme several years earlier."
Markopolos spent the better of a decade combing through Madoff's books. The bookish and media-shy Markopolos started looking at Madoff in 2000 after his boss at an investment firm asked the accountant to figure out how Madoff made his money.
Markopolos couldn't replicate Madoff's results and, even after Markoplos left his firm, continued to feed info to a contact at the SEC, including a 2005 memo entitled, "The World's Largest Hedge Fund Is a Fraud."
"Why would people think I feel good about this?" Markopolos told the Boston Globe. "People think I'm a hero, but I didn't stop him. He stopped himself."
By Derek Kravitz |
February 4, 2009; 1:29 PM ET
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