Analyst Who Tried to Get the SEC to Investigate Madoff Is Worried About His Safety
February 5th, 2009Via: Atlanta Journal Constitution:
The man who waged a decade-long campaign to alert regulators to problems in the operations of fallen money manager Bernard Madoff told Congress Wednesday that he had feared for his physical safety.
Harry Markopolos also assailed the Securities and Exchange Commission in his first appearance before lawmakers. The SEC failed to act despite receiving credible allegations of fraud from Markopolos about Madoff’s operations over a decade.
Because of the agency’s inaction, “I became fearful for the safety of my family,” Markopolos said at the hearing of a House Financial Services subcommittee.
“The SEC is … captive to the industry it regulates and is afraid” to bring big cases against prominent individuals, Markopolos asserted. The agency “roars like a lion and bites like a flea” and “is busy protecting the big financial predators from investors,” he said.
He spoke as several top-level SEC officials, including the agency’s enforcement director, sat three rows back in the packed hearing room, awaiting their turn to testify before the panel.
While the SEC is incompetent, the securities industry’s self-policing organization, the Financial Industry Regulatory Authority, is “very corrupt,” Markopolos charged. That organization was headed until December by Mary Schapiro, President Obama’s new SEC chief.
The SEC has been sustaining volleys of criticism from lawmakers and investor advocates over its failure to discover Madoff’s alleged $50 billion fraud, which could be the biggest Ponzi scheme ever, despite the credible allegations brought to it over years. Amid a financial crisis, the SEC is being accused of further eroding investor confidence, and lawmakers of both parties are calling for a shake-up of the agency.
Madoff, a prominent Wall Street figure, was arrested in December after allegedly confessing to bilking investors in what the authorities say was a giant Ponzi scheme, possibly the largest ever. Markopolos’ repeated warnings to SEC staff that Madoff was running a massive pyramid scheme have cast Markopolos as an unheeded prophet in the scandal.
“The SEC was never capable of catching Mr. Madoff. He could have gone to $100 billion” without being discovered, Markopolos testified. “It took me about five minutes to figure out he was a fraud.”
Markopolos, a former securities industry executive and fraud investigator, brought his allegations to the SEC about improprieties in Madoff’s business starting in 2000 after determining there was no way Madoff could have been making the consistent returns he claimed using the trading strategy he touted to prospective investors.
I for one, invited by Public Citizen to testify before Congress re my sister’s death by asbestos, declined.
I don’t know what these Committee’s do with such testimony. But I would, like Markopolos, be afraid for my freakin life if I went up there on the Hill as a witness.
As if the Committee is worried about your safety. Anyone who testify’s in front of any committee in Washington re the Madoff scandal, or what they know of the financial freakdown should probably have 24/7 protection.
They are witnesses to a MAJOR CRIME.