Harry Markopolos blew the whistle to the Securities and Exchange Commission about Bernard Madoff as early as 2000. Why were his warnings ignored? Steve Kroft has the interview.
Harry Markopolos is a true hero. He found the truth and tried to tell everyone. And nobody would listen. They looked the other way. Now people listen to him.
Robert Mueller should bring Markpolis onto the Special Counsel's Team. It would interesting to have an independent 'outsider' check through the 'maths' of Trump's deals and accounts.
"It took me five minutes to know it was a fraud. It took me another almost four hours of mathematical modelling to prove that it was a fraud." I spilled my tea.
ruzzell907 Imagine what AI could do then. (A little secret here, he mentioned calculus, linear algebra, and statistics. Neural networks combine all of that in one.)
Mathematics at its core is all about "showing proof". That's why I love Math. I really like this gentleman & his attempt at having justice prevail... It's too bad that the SEC was in bed with Madoff! 🤬
@@jalapenohiway Very interesting that you expressed an affinity for Math, which I presume is meant to imply that you appreciate objectivity. I say that because you then immediately followed by expressing a view that is completely steeped in bias. I'm no lover of the SEC, but the SEC was not "in bed" with Madoff - by the time of this fiasco, federal oversight of financial transactions on Wall Street had been stripped practically bare by the federal government, with Greenspan and his pals advocating that fraud, etc. should be left for the markets to address, rather than to be prosecuted. The SEC had no budget and no support from which gain fuel to do any sustained investigations of anyone.
This guy Markopolos, Interviewer: “What if he’s just good?” Markopolos: “No one’s that good.” Interviewer: “Either way he was doing something illegal.” Markopolos: “Either way I knew he was going to prison.” Me: SAVAGE.
His book, "No One Would Listen" is well worth a read. This book goes farther to answer the questions of how and why Madoff did it than anything else I've found so far. Has anyone else noticed Harry bears a strong resemblance to Bob Odenkirk of Better Call Saul?
Same in the medical profession. Everyone knows who the bad doctors are, but nothing happens if concerns are raised. The difference being that those raising the concerns have their careers ruined and never work again
America is rapidly declining into a fifth world nation. In This kind of nation, the merit system is a minority player. Politically correct corruption rules the day.
@@elroyvieira5909 im also thinking that the head of the SEC are putting key people in specific positions to have multiple layers of protection. oh the conspiracy 🤣🤣🤣
Amazing piece. Unbelievable how Markopolis lays bare the incompetence of SEC, as well as its practices to only investigate after a major figure turns self in.
So who at the SEC got fired for their incompetance. Everyone who signed off on closing the case against Madoff should have been fired. They were complicit in his fraud.
The “chosen people” protect themselves, and they not only run Wall Street they run The Bureaucracies in America. Just check out the surnames, it tells the whole story. Try getting a job or running a business with the wrong surname in, well let’s say finance, banking, jewelry, Hollywood. The list goes on.
Thanks for figuring out the Madoff scheme. Too bad so many people lost out and Mark Madoff committed suicide from humiliation he felt he could never overcome. Very sad for Mark's wife and children.
5 submissions of fraud, over an 8 year period, until the SEC finally listened? I think that they should be held responsible for failing to protect investors and also, start cleaning " house" over there, because the people in charge, are not financially savvy!
@@dredgewalker Thats the real kicker isn’t it? Someone as brilliant as Madoff could’ve made these huge amounts of money legitimately with smart investing. And yet he destroyed his family and everyone else around him, only to lose all his money in the end anyway.
@@Anthony-jo7up He just wanted easy money without thinking about the consequences. In a sense he was both smart and stupid at the same time. Smart enough to steal that much money from people and too dumb to realize it will all be exposed and he'd lose everything. Still baffles me how people can be this greedy as you don't need that much money to live a comfortable life. Losing his whole family due to the troubles it caused wasn't worth it. It just shows no matter how much money you have and still isn't satisfied then it's not money that you need to be happy.
what could they have done?. the sec was bribed. And he was the leader of the nasdaq. The lesson of the story is to be diversified and not invest all you money in one nest.
3:29 I actually read his book “No One Would Listen” Markopolos gave a third possible explanation. That Madoff was an extraterrestrial with near perfect market predictability.
Harry - you did the right thing. You could have easily looked away and allow more victims to fall prey. But you didn't. You stood against evil. You fought the battle and won. It takes a real man to do what you did. This will be your legacy. Thank you.
SEC is as good as the people who run it. You can't put people who are friendly with people like Bernie Madoff as heads of the SEC. You can't put the fox as the head of the hen house.
RigelOrionBeta, Your analogy makes absolutely no sense. If the SEC was a fox, and Bernie Madoff was a hen, he'd be eaten by the fox. He wasn't eaten, therefor the SEC is not a fox and Madoff was not a hen.
I like to think that our government is staffed with people just like us. Some are doing time in their jobs, some are highly motivated, some are way out of their league, some are a victim of the Peter principal (promoted up to the point of their incompetence), and some are good at their jobs and have good intentions. The SEC is like any company, just staffed w people, average joes, and like our presidents, we hold them up to higher standards than we should.
A friend of mine was one of the people that suspected that Madoff was fraudulent. He is worth an ungodly amount of money. He was living in NY and in Palm Beach at the time. When he would be in Palm Beach, all of these people he knew were investing with Madoff and he said it was almost like a status symbol to be 'allowed' to invest with Madoff. And these people would sorta look down on him despite the fact that he was worth far more money than they were. Eventually he was told by people what the returns where and like Markopolos, knew that it had to be some sort of fraud. He had a contact at the SEC and told him about the returns Madoff was claiming and that it had to be impossible, but the SEC never looked into it. He then told people that he knew, that he was friendly with, that were investing with Madoff to get out and they bristled at the notion...thinking he was jealous because he wasn't investing with Madoff and they were.
Yeah, but it was all outsiders. Bernie chose his investors wisely because he wouldn't dare approach somebody like my friend, who despite being far wealthier than Bernie's investors, he was respected on Wall Street and would have exposed Bernie. Problem was that given Bernie's status my friend didn't have definitive proof like Markopolos had to blow the entire thing up.
This is one of the best interviews I've ever seen retaining to the Bernie Madoff case. Harry Markopolos is an intelligent man and it's a shame no one listened to him before the fact. But we are listening now Harry.
You’re a fool. You believe whatever they tell you. Math is a mind game. A scam. Numbers only exist in the mind. It is a weak attempt to understand the logic of the Universe. I contend that man has no ability to genuinely comprehend what you call math. The Universe is infinite (as are numbers), and man is finite.
Definitely he is a smart guy and he knows his math, but any ordinary financial analyst could have figured this out if they wanted to. The evidence was stark and overwhelming. Anyone with a background in statistics identifies this scam, you don’t need calculus.
wasilaify And not the first. Enron was pulling the wool over the SECs eyes for years. Very obvious fraud that a chimpanzee with a elementary education could have seen. It should be noted that all of these "financial disasters" have happened when the GOP was in charge. Not a coincidence. GOP+ Smaller Government + Less Regulation + Looser Rules = More Fraud.
Uh both Enron and Worldcom started falling apart less then a year into Bush admin, blaming that on Bush is idiotic. Chris Dodd was probably the single most corrupt politician with his hand in the Enron fiasco and had a big D next to his name. Not excusing repubs there as bad but its more like whoever is in power sells out to wall street as they get most of there campaign funding from them.
It's not just the SEC. My bet is this one of the consequences of "red tape" and "government waste," an issue that involves pretty much every government agency and executive department.
Just finished Harry's book and it was fantastic. Here's the thing, I'm glad Bernie and Peter and a couple others were found guilty and sent to jail. Rightly so. I'm wondering why Shana Madoff, Andrew Madoff and Ruth Madoff are still walking around with any money in their pockets, taking trips, enjoying life. Their sob stories are ridiculous. Shana's fb page boasts about her Yoga, and Andrew Madoff's fb page shows him touring the Grand Canyon, Arches, Moab and Canyonlands National Parks on a brand new BMW motorcycle with the comment "it was so great to tour the parks by motorcycle because I was able to cover both parks in two days." Their denial that they knew nothing about the Ponzi scheme is a farce, and here's why. Shana was the Compliance lawyer; Her job is to know the products and make sure they are following securities regulations. How could she just completely miss out on Bernie's hedge fund? Clearly she knew that Mark and Andrew's trading operation was not handling Bernie's hedge fund trades on the 18th and 19th floors, and even though the SEC was too stupid to figure out there was a secret 17th floor, she would have HAD to have known about the 17th floor, and wasn't it her job as compliance lawyer to examine that as well? And let's suppose that Andrew and Mark didn't EVER go down to the separate secret 17th floor, don't you think they would be suspicious that there were NO TRADERS working on the 17th floor? They would have had to have known just from the Christmas Parties and their famous summer Montauk parties that there were NO TRADERS/ANALYSTS from the hedge fund. Certainly they knew Bernie wasn't capable of calculating the split strike conversion strategy that he boasted of, or make the trades.... there had to be some human component to the day to day trading operations.. Since Andrew and Mark weren't making the trades for Bernie's hedge fund, don't you think they would have asked where the PHANTOM TRADES were being executed? So where was the STAFF that was supposedly running the hedge fund? These three (Shana, Mark and Andrew) aren't stupid. Shana and Mark went to University of Michigan, and Andrew went to Wharton. There is no way they could be THAT naive. Andrew and Mark used "loans" from Bernie (stolen money loans) to purchase real estate. ALL of their assets should be stripped from them. They should be forced to take their kids out of private schools, forced to take out student loans for their kids college expenses, and then just maybe, just maybe,be allowed to inhabit a Habitat for Humanity House, like the rest of the 99% of the population. They ruined SO many people's lives, and I don't think they have any clue whatsoever. Their claiming ignorance is ridiculous; they would've HAD to have known SOMETHING was going on. It's tragic that Mark took his life, but Shana and Andrew need to be locked up for a minimum of 5 years AND stripped of every single penny. And Shana needs to wipe that bitchy, holier than thou grin off of her face. She was a compliance lawyer and she didn't do a damn thing to stop this fraud; she should be stripped of her law license. She's lower than pond scum.
Mark Madoff hung himself two years after his father's conviction. Andrew just died this past summer from cancer. The family is dismantled so don't be fooled by some FB posts, they are not as happy as they may seem. btw I agree with you that they all probably knew or should have known.
Both Madoff sons have deceased, Ruth is in hiding, probably not in this country. His sons were definitely aware of the scam, I don't know about Ruth. I know nothing of Shana Madoff, I will have to look at that.
Anonymous His family was almost certainly totally innocent. This is just vile hatred directed at the undeserving. They were his victims too. On top of the fact that he was family and the patriarch of the family, you are overlooking just how respected Madoff was. He was the former chairman of the NASDAQ for god’s sake! His integrity was what he was famous for. How easily he got people to trust him was how he got all these investors. If you were his family, you almost surely would’ve trusted him too. And also, before this happened, a Ponzi scheme this big had never been discovered. It would’ve been almost unbelievable that a Ponzi scam so big could even be carried out. People were stunned when this was revealed. It just would’ve seemed more realistic that their father was a great investor, than maybe the greatest fraudster ever. Great investors are rare, but they do exist. Con men who control portfolios in the billions? That’s rarer, maybe even unique. Even the very existence of the SEC would’ve reassured them. People trust the SEC. If not for Markopolos, most wouldn’t be aware how inept they could be, and how little they know of finance. Just listen to Madoff in this very video talking quite convincingly of the SEC, and how you can’t fool them. It’s easy to see how people would’ve bought that BS hook, line and sinker - unless you were an expert like Markopolos, you’d probably have no clue of anything about the SEC, and how they could possibly fail to notice such a huge scam.
Look at the thumbs up / thumbs down votes on this sub-thread (after 3 years!). Anonymous has +7 (after I gave him one) and all the replies have 0. Who is stuffing the ballot here, and how are they doing it? 99.99% of Americans would want to +1 this entire thread. So who is BUYING the down votes?
I agree, I haven't read the book, but the documentary on this gentleman's findings was great, it also shows that it was a worldwide ponzin scheme that included governments. This whole scheme was sickening, disgusting, and financially scary.
Yeah I'm buying puts on GE, I remember reading years ago about Macropolos in a book about Enron. Believe me he was attacked just as ruthlessly then and CEO's bought shares and reassured. He was right. He'll be right again, he doesn't care about the money this guy only cares about the truth lol.
Petar same here. GE is in a world of hurt after this. The fact that this man made money from his investigation doesn’t take away anything from the findings. KPMG made money pretending GEs books were clean. The directors of GE made money too.
Honest? Lol. They knew it was too good to be true. They just caught the short end. Someone tells me a portfolio is returning more than 10%, and I’ve got 700 questions. These people were greedy, gullible, and lazy, all of which-ironically-takes a certain amount of effort. I don’t feel sorry for them at all.
I would like to hear from the people that actually made money for those 25 years. It never gets talked about or interviewed the clients that actually made good profits with Madoff.
The SEC is full of incompetent inept government employees. How many of these SEC government employees have been fired? Basic auditing 101 would have raised many flags.
This man is a true American hero. Not only is he a mathematical genius, but he’s also courageous enough to go after big business, and expose them, as well as other fraudulent government regulatory agencies, to shareholders, & to the public. I wish there were more people like him around.
Markopolos did not take Madoff down. The SEC never listened to Markopolos. Madoff ran out of funds, admitted the scheme to his sons and his sons contacted the FBI. The SEC only performed the autopsy. I can proudly say I actually watched the video and read about the incident.
I wish the Senate got rid of the SEC entirely. Stop telling people there's no insider trading going on at Wall St. YOU ENTER THE STOCK MARKET AT YOUR OWN PERIL. Let's see how long the BS lasts if unsuspecting working people pull out of the stock market entirely!
better yet? Before investing 10k, or 10 million, take a very short series of classes on investing. Literally, 12 hours of your time, and boom, you could see the split strike fraud a million miles away.
Not that simple. Madoff's phoney "investments" had diversity written all over them. And a lot of people had no idea that their money was even with Madoff. If by Diversify you mean.. not putting ll your money in the stock market, then yes.
@Honesty First It's a quote of Bonaparte and I fully support it. If you are too honest people and organizations (the state) will take advantage of that. Poor is if you do not have the resources to do things you would like to do or achieve.
OMG. This 80 year old man lost an 8, let say it again, 8 figure fortune and is left with only enough income for 60 freaking daze? Couldn't he have invested 4 figures, 5 figures, even 7 figures instead? People need to understand the concept of the bugout bag.
I read somewhere "don't invest anything that you can not afford to lose". Also, make sure your investments are diversified and have cash set aside for emergencies or you lose your source of income.
Mathematics at its core is all about "showing proof". That's why I love Math. I really like this gentleman & his attempt at having justice prevail... It's too bad that the SEC was in bed with Madoff! 🤬
I don't feel the least bit sorry for these investors. They are the same ones who bragged about making money with Bernie while everyone else was not invited into the club.
You have no idea how many honest people, and how many non-profits, suffered due to Madoff's lies. Ever heard of Elie Wiesel? You're just bitter because you're too stupid to figure out investments.
And another thing, this Markopolos guy should have sent everything he knew about Madoff anonymously to the media. They are like wolves and once they are let loose the SEC would have had no choice but to take action. In my opinion, that was where he failed.
I agree, plus he could have published it on social media or a blog. He just did things the old fashioned way and kept it hush hush. Now, people go straight to social media and the media.