A good recap of Harry Markopolos’s testimony and scathing attack on the SEC. And a welcome to Jesse’s Cafe Americain.
Markopolos Delivers Multiple Bombshells in Congressional Testimony
Courtesy of Jesse’s Café Américain
"Government has coddled, accepted, and ignored white collar crime for too long.
It is time the nation woke up and realized that it’s not the armed robbers or drug dealers who cause the most economic harm, it’s the white collar criminals living in the most expensive homes who have the most impressive resumes who harm us the most.
They steal our pensions, bankrupt our companies, and destroy thousands of jobs, ruining countless lives."
Harry Markopolos in Congressional Testimony
Harry Markopolos, the Madoff Ponzi scheme whistleblower, is delivering bombshell testimony with few punches pulled before the US Congress this morning.
Among other things:
– There were 14 ‘feeder funds’ operating with Madoff to channel investor to him. Only two have been publicly revealed. There are twelve more. Markopolos is going to be speaking with French and Swiss authorities to reveal others who have not yet acknowledged their role, and their losses.
– There are undisclosed investors in the Madoff scheme among prominent Europeans, and even royalty.
– Markopolos feared for his life because of the involvement of the Russian mob and South American drug cartels involved with Madoff, and because of the stonewall treatment his repeated and detailed disclosures received at the SEC.
– The SEC is overstaffed with young attorneys who do not understand the business they are regulating. They need to hire older hands with direct financial markets experience and accounting backgrounds and incent them.
– The SEC does not wish to pursue ‘the big cases.’ They prefer to act on small cases.
– The SEC has done little as compared to the State Attorneys General.
– The SEC has a problem described by others as ‘deep capture’ wherein the regulators look to jobs in their industry after a few years in the agency. Their management protects industry insiders from investigation.
– Madoff did not act alone. There were enablers who were willfully blind, and there were those who were directly involved with him in his deception.
– The SEC does not even have access to Bloomberg terminals or read the WSJ or Barrons
– The new head of the SEC, Mary Shapiro, needs to clean house with ‘a wide broom’ among the management of her new organization
– Markopolos was offered a job to head up a new super-agency several times by the Congressmen, only half in jest, but he demurred because of family commitments. Too bad because we have a hunch he’d soon be known on Wall Street as the "flagellum Dei" (Latin: "Scourge of God").
