Library:No One Would Listen
| No One Would Listen: A True Financial Thriller | |
|---|---|
| Author | Harry Markopolos |
| First published | 2010 |
| ISBN | 978-0-470-55373-2 unverified |
| Role | Primary source |
| Domains | Business, Finance & Scams |
| Tactics | Fraud or Scam Statistical & Evidentiary Distortion |
No One Would Listen: A True Financial Thriller is a 2010 book by Harry Markopolos.
Summary
Harry Markopolos, a financial analyst and fraud investigator, spent nearly a decade trying to persuade the US Securities and Exchange Commission that Bernard Madoff's investment business was a fraud. In this memoir he describes how he concluded that Madoff's returns were mathematically impossible, his repeated submissions to regulators, and the agency's failure to act until Madoff confessed in December 2008. Written with the help of his investigative team, the book is both a detective story and a sharp critique of regulatory failure.
Spotting the fraud
In 1999 Markopolos was asked by his employer, a Boston investment firm, to replicate Madoff's strategy so the firm could offer a similar product. He quickly concluded it could not produce Madoff's steady returns. Among other problems, the volume of options Madoff would have needed exceeded the total available in the market, his returns were far too smooth, and his trades could not be found by counterparties. Markopolos concluded that Madoff was either front-running his brokerage customers or running a Ponzi scheme.
The submissions
Beginning in 2000, Markopolos and his small team submitted detailed evidence to the SEC several times. His 2005 submission was titled "The World's Largest Hedge Fund is a Fraud" and listed dozens of red flags. The SEC examined Madoff but did not uncover the fraud. Markopolos describes his frustration, his fear for his own safety, and approaches to journalists who did not pursue the story.
After the collapse
After Madoff's arrest, Markopolos testified before Congress in 2009, criticizing the SEC as captured, slow and lacking expertise. The SEC's inspector general later issued a report documenting the agency's failures. Markopolos went on to pursue other fraud investigations.
Relevance to Bullshitopedia
No One Would Listen shows that frauds can be detected by careful analysis of public information and simple logic, and that institutions can fail to listen even when warned in detail. It is a case study in why credible whistleblowers deserve serious attention.
Related entries
- Bernie Madoff's steady returns
- The Wizard of Lies (Henriques)
- Ponzi's Scheme (Zuckoff)