No One Would Listen: A True Financial Thriller by Harry Markopolos (rainbow fish read aloud .txt) 📗

the meeting the man asked politely, “You know, Mr. Madoff, this all sounds good, but the fact is you’re getting older—and what’s going to happen to the company when you’re no longer able to manage it?”

Bernie apparently waved his hands in the universal “no problem” gesture. “There’s nothing to worry about,” he explained. “I’ve been grooming my two sons to take over their whole life. If anything happens to me, they know what to do.”

Who knows if that was true? But the executive shook hands with Bernie, promised to think about it, and left. As he got on the elevator, two other men joined just as the doors were closing. As the elevator started going down, they began making some small talk. One of them asked the other, “So how’s business going?”

The other young man nodded, saying, “I got to tell you, even with everything that’s going on, we’re doing great. It’s really amazing.”

The curious executive couldn’t help himself, and he asked, “Do either of you know Bernie Madoff?”

They both turned to look at him, and one of them responded, smiling, “Yes, he’s my dad.” They said a few more words before the doors opened. Later, when the executive thought about it, he believed this apparently chance meeting in the elevator seemed much too coincidental. He was supposed to overhear this conversation. The whole thing appeared to be orchestrated in an attempt to sway his decision. As a result, he decided not to invest in Madoff.

Among the people Kotz interviewed while preparing this report was Bernie Madoff himself. Kotz spent three hours in prison with him. It’s impossible to know how much of what Bernie told Kotz that day is true. Bernie Madoff’s entire life had been a complete lie for decades. Imagine that. We never stopped during our investigation to wonder what kind of human being Bernie Madoff actually was, what kind of insanity it must have taken to get through every day. In all that time there wasn’t one day, one conversation, in which he could tell the truth. Every single word he said carried with it the risk of exposure. Every time he went to a synagogue or had dinner with friends or attended an affair, he had to look people whose money he was stealing right in their eyes and smile and humbly accept their gratitude—and all the while he was probably thinking, You suckers. And if you choose to believe Bernie, those people he was lying to also included his wife, his sons, his sister, and other members of his family. For Bernie, lying became his natural way of life. So when he told Kotz he sometimes wished he had been caught sooner because the stress was incredible, only he knows if he is telling the truth.

Unfortunately, the government wasn’t quite done with me. I’d told my story and made my recommendations, and I had a tremendous amount of work to do in my False Claims Act cases. My whistleblowers were depending on me to get this work done. The anger I’d felt was gone; it was up to the proper authorities to make sure the SEC followed through on its promises and that legal action be taken against those people who deserved it. But after Kotz’s report was issued, I was invited to appear in front of the Senate Banking, Housing, and Urban Affairs Committee to comment on the report. I knew I owed it to David Kotz to do that.

So when I was invited to support Kotz’s report I agreed, and on September 10, 2009, I appeared before what was supposed to be the Senate Banking Committee. The stated purpose of this hearing was to examine the information contained in the inspector general’s report. It was a strange hearing. David Kotz testified first, and the committee asked him a lot of very good questions. But after a period of time the committee adjourned temporarily to allow the senators to vote on the floor. Only Senators Chuck Schumer, who had made a phone call to the SEC, and Jeff Merkley, a Democrat from Oregon, returned. Schumer took over the questioning.

During the recess, Gaytri, Pat Burns, and I had gone for a walk. When we returned, the whole feeling in the hearing room had changed. The SEC had reserved all the seats in the room. With the exception of two senior officials from the Association of Certified Fraud Examiners who had come to Washington from Texas for this hearing, the entire room was filled with SEC staffers. Gaytri took one look around and whispered to me, “The fix is in.” We were hoping the room would be full of victims, an audience we considered among our biggest supporters; but the victims had been shunted to a hearing room on the floor below us to watch the proceedings on closed-circuit television. We couldn’t have picked a more adverse audience.

I was joined on the panel by Robert Khuzami, the new director of the SEC’s Enforcement Division, and John Walsh, the SEC’s acting director of Compliance, Inspections and Examinations. In my opening statement I praised David Kotz, explaining that if my three sons grew up to be men like him I would be very proud. As for the SEC, in my prepared submission for the official record I wrote, “Even a great fiction-writer like Stephen King couldn’t have made up the nightmare that the SEC was pre-December 11 th, 2008. The SEC’s actions and inactions during the Madoff investigation were a comedy of horrors.” But in my oral testimony I was a little more succinct, telling Senator Schumer, “In a nutshell, the SEC staff was not capable of finding ice cream in a Dairy Queen.”

I was surprised that I was asked so few questions in this hearing. Senator Schumer seemed to focus on the other members of the panel. In fact, throughout the panel questioning Gaytri was handing me index cards with suggestions, but I really got very little opportunity to speak. Finally she started handing me cards