As the aftermath of the Bernie Madoff scandal reverberates throughout the economy, an analyst has testified that his warnings over the years were ignored by the government’s securities watchdog agency.
Harry Markopolos appeared before the House Financial Services subcommittee last week to detail the investigative work he and his colleagues launched when they started suspecting that the brokerage firm ran by Madoff was a scam. He talked about threats he received during the time and the fact that his efforts went ignored by the Securities and Exchange Commission for almost a decade.
Incredibly, Markopolos’ investigation relied solely on open source information. "Every bit of information we obtained was in the public domain. We never had any secret insider documents or smoking gun e-mails," he said, as quoted by US News and World Report.
He added, "What troubles us is that dozens of highly knowledgeable men and women also knew that [it] was a fraud and walked away silently, saying nothing and doing nothing."
On Monday, the SEC announced that its top enforcement official, Linda Thomsen, will resign.
Bernie Madoff, former chairman of Bernard L. Madoff Investment Securities, was arrested on December 11 and charged with running a massive Ponzi scheme that wiped out some $50 billion dollars in wealth.