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

cannot help if the inspector general is doing something; you cannot help if it is an ongoing violation. I mean, if there is a snowstorm in Washington, the SEC cannot help. That must be one of their conditions.”

It only got more difficult for the SEC when the committee members finally got to ask their questions. Obviously these politicians knew there were a lot of angry and frustrated constituents watching them. And I don’t think anyone was more angry than New York’s Gary Ackerman. “I am frustrated beyond belief,” he began. “We are talking to ourselves and you are pretending to be here. I really don’t understand what is going on. The previous witness said that you guys as an agency act like you are deaf, dumb, and blind. I figured you were coming here and you were going to testify before Congress. Don’t you dare tell anybody you testified before Congress. You are going to be subjected to violation of false advertising lawsuits.

“You have told us nothing and I believe that is your intention. I figured you would leave your blindfolds and your duct tape and your earplugs behind, but you seem to be wearing them today. And instead of telling us anything, you read from the preamble of your mission statement and broke it up into five segments. What the heck went on? You said your mission was to protect investors and detect fraud quickly. How did that work out? What went wrong? It seems to me a private—With all your investigators and all of your agency and everything that you all described, one guy with a few friends and helpers discovered this thing nearly a decade ago, led you to this pile of dung that is Bernie Madoff, and stuck your nose in it, and you couldn’t figure it out.”

I don’t remember, but I’m pretty sure I smiled when I heard that. At times the questioning got so heated that Gaytri would walk out into the hearing room because she wanted to feel the tension. I just sat on a couch, eating a sandwich, savoring every single moment. There wasn’t a moment, a second, I felt sorry for these people. I just hoped that the investors they had failed to protect were watching. It wasn’t much compared to what Madoff’s victims had lost, but at least they would know that someone cared about them and that the SEC leaders were not going to walk away unscathed. Maybe it would never be payment in full, but it was a down payment.

Ackerman continued attacking. “You couldn’t find your backside with two hands if the lights were on. Could you explain yourselves? You have single-handedly defused the American people of any sense of confidence in our financial markets if you are the watchdogs. You have totally and thoroughly failed in your mission.”

When Linda Thomsen mumbled some response to his question, he interrupted her, asking, “Were you suspicious when the guy had a one man accounting firm investigating a $50 billion empire? And you keep saying alleged, alleged. This guy confessed on national television, you might have noticed....”

Linda Thomsen tried to explain, saying, “We have an action pending in the Southern District of New York.”

Ackerman pointed out, “You took action after the guy confessed. He turned himself in. Don’t give yourself any pat on the back for that.”

After Linda Thomsen again explained that “We cannot answer as to the specifics ... ” Ackerman said flatly, “You know, if anybody made the case better than Mr. Markopolos, and I didn’t think anybody could, about you people being inept, you have made the case better than him.” I just sat there, thinking silently, Thank you, Congressman.

It was a wonderful afternoon, just great. Obviously, members of Congress don’t swear inside the hearing room, but while we were sitting in the anteroom they would come inside and let loose. They were livid; they were rip-roaring mad. I remember one member fuming, “If this is what our regulators are like, we don’t need them. It’s better the public knows they aren’t protected than to think they have protection from these clowns.”

New York’s Carolyn Maloney was as angry as Ackerman. “Mr. Markopolos in his testimony earlier testified that he brought complaints five times in writing to the SEC, and these were detailed complaints. It wasn‘t, ‘I think something’s wrong.’ These were detailed complaints that this is wrong. ‘They are not trading. They are not doing this. Here are examples.’ And it was a very specific complaint, not once, not twice, not three times, but five times to the SEC.... And how many more times would a whistleblower have to bring complaints to the SEC for them to have investigated the Madoff case? ... Now, if you went in and just asked for the trade slips or proved that they were doing trades when whistleblowers were saying they weren’t doing trades, then you could have shut him down in one-half hour. You could have shut Madoff down in one-half hour by just following up on one of the allegations.”

“As to the specifics of the investigation,” Thomsen replied, “I can’t answer.”

Eventually I started writing down questions they might ask, questions I knew these people couldn’t answer. The hearing continued through the afternoon, and when it was over, the SEC had been exposed and embarrassed in front of the entire nation.

Two days after this hearing, the SEC’s acting general counsel, Andrew Vollmer, was replaced. Five days later Linda Thomsen resigned; according to an SEC press release, she was leaving to “pursue opportunities in the private sector.” Five months later, Lori Richards, the SEC’s director of the Office of Compliance, Inspections and Examinations, resigned to pursue other growth opportunities. Eventually all but one of the SEC directors on that panel was replaced: The acting general counsel was replaced by David Becker, the head of enforcement by Rob Khuzami, and the director of compliance by John Walsh. It was nearly a clean sweep.

Gary Ackerman escorted us out of the building. He was still