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

angry. We stood outside the Capitol in the freezing cold for more than a half hour as he explained what he intended to do next to make certain the SEC was reformed, and if it couldn’t be reformed, it would be closed down.

I didn’t even feel the cold.

Chapter 9

Soaring Like an Eagle Surrounded by Turkeys

The greatest irony was that by failing to pay attention to my submissions the Securities and Exchange Commission had succeeded in giving me a national platform—which I intended to use to either help create a new and functioning agency or put it out of America’s misery. The SEC officials had created their own worst nightmare. They’d picked a fight with the wrong Greek.

After the agency had insulted a congressional committee by failing to prepare for its hearings and then refusing to answer questions because telling the truth might adversely affect an ongoing investigation, I had no doubts Barney Frank was going to do whatever was necessary to change the culture of the SEC.

But there were also a lot of dedicated people inside the SEC who wanted it to be better. Ed Manion and Mike Garrity weren’t alone. After many phone conversations, both Gaytri and I felt that the SEC’s inspector general, David Kotz, might be one of those people. Pat Burns had vouched for him, telling me he was the real deal. “Every time he does a report he kicks them in the balls multiple times,” he said. Kotz emphasized that his report was going to be thorough and honest. But to accomplish that, he needed my cooperation. He just wanted to know what happened. So I had volunteered to meet with him in his office the day after my House testimony—inside the SEC building.

It had seemed like a good idea at the time.

I realized, perhaps too late, that I was going to be as welcome at the SEC as a wolf on a chicken farm. After I had shredded this agency on nationwide TV, I expected its employees to despise me. As I mentioned to Gaytri, it always makes me a little uneasy when the welcoming committee either is armed or has access to a rope. Actually, I really had no idea how we would be greeted, but for protection I asked my 60 Minutes producer, Andy Court, if he’d allow Reuben Heyman-Kantor, his junior reporter, to stay another day in Washington and accompany us to the SEC with a handheld minicam. I was hoping to use the incredible power of a TV camera to help us balance the odds.

Gaytri and Phil Michael went with me to this meeting. As we approached the front of the building, I saw the SEC’s general counsel lying in wait, standing next to another man, whom I didn’t recognize. Maybe it was just a coincidence that they happened to be standing there when I arrived, and an equal coincidence that when they saw the camera they turned around and scurried to an elevator bank.

David Kotz was waiting for us on the far side of security. The 60 Minutes reporter was permitted to film Kotz greeting us and escorting us into the building. As we were to learn, David is not shy. But after filming the introductions, our junior 60 Minutes journalist was asked politely to leave.

The meeting was held in a large conference room. David Kotz was joined by four other people, among them his deputy inspector general, Noelle Frangipane; Senior Counsel Heidi Steiber; Senior Counsel Chris Wilson—and a transcriber. I’d assumed this was going to be an informal meeting in which I basically described my interactions with their agency over the intervening eight and a half years, but before we began I was asked if I minded testifying under oath.

It turned out that it was not going to be an informal chat, but rather a transcribed deposition under oath. Gaytri challenged them immediately: “What do you mean? You didn’t say anything about that.”

They explained, “Well, all of the SEC staff is testifying under oath, and they may say it’s unfair if you don’t, and we don’t want to give them an out.”

That made sense to me. I didn’t mind taking an oath; I was going to tell the truth. And Phil pointed out that in this situation an oath was not even necessary. Whether or not I took it, making a false statement to the federal government is a crime punishable by up to five years in prison and a fine of $250,000. I raised my right hand and swore to tell the truth.

I had spent more than two decades dealing with the SEC, both while working in the financial industry and as a potential whistleblower, so I had seen up close how abysmally it was run. And I had the documentation to prove it. In addition, because I had been working with other, far more competent government agencies the past several years as a fraud investigator, I was in the advantageous position of being able to do the type of comparative analysis that nobody had done before. I wanted the SEC to be effective, and I believed I could help make that happen.

It became clear almost at the beginning that the purpose of this investigation was much deeper than simply solving problems inside the agency. David Kotz began by telling me right off the bat that he was conducting a criminal investigation. Now, that was odd, because I knew that the SEC has no criminal investigative power. By law, it handles only the civil portion of securities cases; criminal matters have to be referred to the Department of Justice. I remember wondering if the Department of Justice had appointed David Kotz as a special assistant U.S. attorney with criminal investigative authority. Phil Michael nudged me with his elbow to make sure we were on the same wavelength.

So, this was a criminal investigation. Well, I knew for sure I wasn’t a criminal, and I was pretty sure Gaytri and Phil weren’t suspects; so the only people