No One Would Listen: A True Financial Thriller by Harry Markopolos (i wanna iguana read aloud .txt) 📕

Poor Ed Manion. He was the really good guy through all of this. At least once a week I’d call him and let all my frustration out on him. “Your agency sucks!” I told him. “Your people are beyond incompetent. I don’t think they’re capable of catching a cold in the winter. I can’t even believe some of these people get dressed by themselves in the morning. I mean, most of your staff barely respond to heat and light.

“Believe me, Ed, this Meaghan Cheung is no Mike Garrity. I’m handing her the biggest case of her life and she treats me like I’m bothering her. There’s no way she’s the slightest bit interested in this case. I’m telling you, the next question she asks’ll be the first one. What kind of agency are you people running?”

Ed felt as terrible about it as I did, but there was nothing he could do about it. He reminded me that Boston and New York had a competitive relationship. If a referral came to New York from Boston, the New Yorkers were more likely to think Boston was trying to dump a crap case on them rather than respecting policy. Probably the last thing they believed was that Boston had a career-making case and was handing it over because it was the right thing to do. It was like the Red Sox trading Babe Ruth to the Yankees.

I was furious with Meaghan Cheung, but I understood that none of this was really her fault. She was simply a product of the system. She had all the training that the SEC required; she had all the resources that were available to someone on her level; and it wasn’t nearly enough. The SEC’s capital markets work experience requirements were way too low, the exam quality standards were abysmally low, and that started at a level much higher than Meaghan Cheung. As an employee she was no better and no worse than most employees of the agency. In fact, we later found out that none of these people, Cheung, Bachenheimer, or their assistant, enforcement attorney Simona Suh, had ever investigated a Ponzi scheme. They wouldn’t have known what to look for, and as part of the bureaucracy they didn’t want to look unqualified or unprepared by asking someone like me for assistance. It’s the Ed Manions and Mike Garritys who are the exceptions, whereas she was typical.

While this was going on, Cheung and the other executives in her office spent their time investigating minor frauds and getting an occasional conviction and headline. They were going after the fleas instead of the elephant, which is what they had been trained to do, and there was no incentive for them to do anything beyond that. In the world of the SEC, a case is a case, and going after a hard target like Madoff counts the same as going after some tiny retail broker. There are no bonuses for doing the big cases that require a tremendous amount of work; in fact, that may create problems because those big guys, the sacred cows, are often major political donors. I was told by a government agency, for example, that at some point New York Senator Chuck Schumer called the SEC to inquire about the Madoff investigation. There is absolutely no evidence of any wrongdoing on Schumer’s part at all, zero, and no suggestion that there was any intent on his part to interfere. Senator Schumer apparently made the call on behalf of his constituents. The problem is that the SEC is funded by Congress, so its employees are particularly sensitive to congressional inquiries. So for a middle-level SEC employee with ambitions, any case in which an important politician is involved is a case he or she wants to stay far away from. It’s a lot safer to go after small potatoes.

As the weeks passed, it became obvious to me not only that Cheung wasn’t going to do anything to stop Madoff, but that she didn’t seem to appreciate the danger I was in. What was really frightening to me was the fact that she knew my identity. It was clear to me that she was incompetent for this type of case. It was possible she was corrupt—although I had no evidence of that, but it would not have surprised me if she was also careless enough to allow my name to get out. The more I considered the potential danger, the more anxious I got. I began wondering if I had raised my head too much. It seemed like every time we peeled another layer of the onion it became a little more frightening because we found another layer. From the large but local fraud we originally discovered this had grown paper by paper into a massive international scheme spread across several continents and involving the rich, European royalty, and probably some of the most dangerous men in the world.

I was boxed in: I was trying to alert the government about how big this thing was, but because it was so big the government refused to take me seriously. Basically, their attitude was nothing could be that big without being discovered, so they wouldn’t take the actions necessary to discover it. To the SEC, I suspect, I was simply crying wolf, and it seemed like every time they ignored me that wolf got bigger, which made it less likely there actually was a wolf.

The fear was growing inside me. I’d experienced something like it before. In September 1985 the army had sent my National Guard infantry brigade’s command group to Germany for training and we had been targeted by the Red Army Faction terrorist group then waging a bombing campaign in Frankfurt. We’d been put through a pretty good training course that taught us how to protect ourselves, which included checking vehicles for bombs and what to do if we were taken hostage. The enemy then had been a well-organized terrorist cell that had prepared a hit