Madoff whistleblower: SEC “abject failure”


Harry Markopolos, who told the SEC about Madoff in 2005, will testify before Congress today. (prepared statement PDF)

From financial journalist Gary Weiss

It is absolutely devastating. Among other things, Markopolos says that because of the SEC’s “abject failure” to do anything, because of its “investigative ineptitude and financial illiteracy,” he was in fear for the safety of his family.

No. It was not incompetence. It was quite deliberate. SEC was headed by free marketeer zealots who quite methodically set out to insure that nothing would “interfere” with the markets.

Of course there was certainly ample opportunity for corruption too. Not to mention Markopolos being, probably quite justifiably, scared for his life. “If Mr. Madoff was facing life in prison, there was little to no downside for him to remove any such threat,” he said.

So Markopolos apparently thinks Madoff is quite capable of having someone killed. Tell me, just who is this Madoff fellow and most especially, who are those, still hiding in the shadows, that helped him pull this off?

This is an infuriating document. Infuriating to me personally, because I can tell you that if Markopolous had come to me or to anyone at Business Week — which at that time (May 2000) had editors who could actually understand such things — he’d have been taken seriously and his allegations would have been investigated thoroughly.

Markopolos laid out the case against Madoff. He spoon fed it to the SEC, and they spat it out. Something needs to be done to prevent this from happening again, or else, really, what is the point of having an SEC?

Why did they spit it out? Who specifically at SEC killed the investigation? And who are their friends? Let’s follow the money trail in all of their bank accounts.

PS Self-evident thinks Markopolos may be a bit of a crank, not that it excuses anything, they say, but still…


  • Steve

    I was very impressed with Markopolos testimony. I really would question anyone’s motive on doubting his story.
    My impression is he has a lot of credibility.

  • Marty

    Here is a Big ONE……..I am blowing the whistle on FEMA & Gulf Stream. No one is paying attention so just like the SEC & Maydoff this is going to hit the news when it is so BAD that everyone is Mad.
    There are approx. 10,000 families still living in those Fema Formaldehyde trailers due to the cover up by FEMA & trailer manfu. hiding it while they OKed the sale at auctions of these trailers. The recall should have been 100% but they were unwilling to take care of everyone. Lawsuits are going to hit the gov. for Millions of $$$$$ from people getting sick and dying. FEMA is refusing to buy them back or provide other housing. I know, I called and they will NOT do a thing. FEMA knew about the Formaldehyde levels and still went ahead and sold them. It would be just like a CAR company, toy manfu or Peanut Butter manfu. knowing the product is BAD and going ahead and selling it ………… then after being discovered…….refusing to do a 100% recall…….just leaving 10,000 families out there to die.

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