Movie Mom

Movie Mom


Interview: Harry Markopolos of Chasing Madoff

posted by Nell Minow

The award for the biggest “I told you so” of all time has to go to Harry Markopolos, who fought for nine years to convince anyone — regulator, prosecutor, journalist, or customer — that Bernard Madoff was a crook.  Finally, Madoff turned himself in for what turned out to be the biggest financial fraud in history.  At least, it’s the biggest one we know about so far. And it continues to make headlines, the latest today as a court ruled that Madoff victims cannot recover the fictitious profitsreflected on the statements they received.

Markopolos is the subject of a new documentary called “Chasing Madoff.”  He spoke to me about preventing and detecting fraud and the cases he is involved with now.  He will be attendng the Taxpayers Against Fraud conference in Washington, D.C. next month.

YouTube Preview Image

In the movie, you describe yourself as the boy who cried wolf — except that there was a wolf.

It felt like a fairy tale or was entering The Twilight Zone, no straight lines, just crooked lines.

I can understand why harried bureaucrats and conflicted politicians and journalists might be reluctant to tell the emperor he had no clothes. Madoff was a very connected and distinguished man. But why would the people who had money invested with him have no interest at all in asking him about the questions you raised?

The key point is that the smart people assumed he was front-running. That would put Madoff in jail if he was caught, but not the people who invested with him, and they’d still have the money. He was handling 5-10 percent of the stock value trades in the US and they assumed they were the beneficiaries of the fraud, not the victims. He intimidated people into not asking any questions. If you tried, he’d offer to give your money back. People did not pursue it because they wanted to remain in the money club.

Why would such a successful man think fraud was worth the risk?

You’re assuming he was successful before. He had a boiler room operation out of his apartment when he first entered in 1962. He had a 46-year-long crime spree.

Why did he finally give up?  To protect his sons?

To protect himself. It didn’t start out dangerous. When I saw the offshore hedge funds putting money in, I knew it was organized crime, laundering money against host nation tax authorities. Prison was the only place to keep him alive.

Do we know the truth now? Have you read his interviews since going to jail?

He is still lying. One or two or three things are true; the rest are lies. It is true that he hates me; he said that. He worked with the Chicago Board of Exchange and the big banks; they were willing conspirators. He named some names, threw some people under the bus. But three out of four of them are dead and the other one is 99 years old. There were a lot of people in bed with him.

Have any lessons been learned? Are we doing a better job of preventing and spotting fraud?

Not really. They should call them “compliant officers,” not “compliance officers.” Their specialty is looking the other way and not rocking the boat. You might as well give them a broom, they just sweep things under the rug. They are about appearances, not reality. Our cases against Bank of New York and State Street are moving forward and more are in the pipeline. For years, they were taking .3 of a percent from every trade for their pension fund clients.



Previous Posts

Should Movie Audiences Text to the Screen?
It is annoying enough when someone near you in a movie theater takes out a cell phone to text. Imagine how it would be if you then saw the text on the screen. That's what a Chinese theater is experimenting with in what they are calling "bullet screens." The idea is that what you are there to enjo

posted 3:59:17pm Sep. 02, 2014 | read full post »

Back to School Guidelines for Parents on Kids and Media
Screen time is a treat, not a right. It’s a good idea to make sure that it comes only after homework, chores, other kinds of play, and family time. Make sure there is some quiet time each day as well. The spirit is nourished by silence. All too often, we try to drown out our unsettled or lonely fe

posted 8:00:27am Sep. 02, 2014 | read full post »

After the Ice Bucket Challenge: Two Upcoming Movies About People With ALS
The Ice Bucket Challenge has brought a lot of money and attention to a devastating illness, ALS or Amyotrophic lateral sclerosis, sometimes called Lou Gehrig's Disease for the the New York Yankee who had to leave baseball when he was afflicted with ALS. Two upcoming films about people with ALS

posted 7:00:17am Sep. 02, 2014 | read full post »

Thursdays in September on Turner Classic Movies: The Jewish Experience on Film
This month, TCM has an excellent series of films about the Jewish experience, every Thursday. TCM proudly presents The Projected Image: The Jewish Experience on Film, a weekly showcase of movies focusing on Jewish history and heritage as portrayed onscreen. Co-hosting the films each Thursday is D

posted 9:21:56pm Sep. 01, 2014 | read full post »

Start the School Year With a No-Screen Week
A new study shows another good reason to detox from all screen time now and then, especially for kids.  Children who take a five-day break from all screens are better at reading real-life facial expressions to understand the emotions of the people around them.  Psyblog described the study, which s

posted 3:56:33pm Sep. 01, 2014 | read full post »




Report as Inappropriate

You are reporting this content because it violates the Terms of Service.

All reported content is logged for investigation.