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

my whistleblower teams. Gaytri was going to be sitting on my other side. And right in front of me 60 Minutes was going to be shooting my testimony in high definition.

The night before I was to appear, we got a copy of the SEC’s testimony. It was ridiculous, nothing more than a smokescreen. The SEC admitted it had no defense, but also refused to admit culpability and didn’t have the courtesy to offer an apology to the victims. Reading it made me very confident that they had no idea what was about to hit them. Clearly they were not prepared for this battle. They hadn’t had weeks of nights with little or no sleep; they hadn’t spent 100 hours preparing. Basically, they had copied their web site. Their entire defense appeared to be, we don’t have to defend ourselves because we’re the good guys.

At dinner that night I sat with my lawyers, along with Jeb White and Pat Burns of Taxpayers Against Fraud, as they read the SEC’s testimony. I knew we were in good shape when they started laughing at it. “I can’t believe they’re going to go with this,” Phil Michael said. “This is like no-testimony testimony or the no-defense defense.”

When Gaytri added, “It looks like they’re going to rely on their reputation,” everybody laughed again. When we returned to the hotel, Gaytri and I had a final discussion about the statement I would make the next morning. Until that time she had strongly advocated giving the milder presentation, but reading the SEC’s arrogant nontestimony had completely changed her mind. “You should go with your original,” she said. “Get ’em, Harry.”

On the morning of the 4th I woke up early and excited. I ironed my suit to make sure the creases were sharp. When we got to the Capitol building we found a long line of people waiting to get in. We actually got held up briefly at security because Phil Michael’s knee replacement set off the alarms. I felt like an athlete in the locker room before the biggest game of his career. I went into the men’s room and called my cousin, Pam, and gave myself my own pep talk. “I’m really going to let them have it,” I told her. “I’ve spent eight and a half years being treated like the SEC’s doormat. These people have put me through hell and now it’s my turn and I’m going to let them have it with both barrels. I’m going to put them down in my opening statement and I’m never going to let them get back up. I’ve got lots of ammo and I’m going to keep shooting until the chairman tells me to stop. I’m going to kick ass and name names.”

My goal was to make this the worst day in the entire history of the SEC, not just because it had earned it, but because the only way it was ever going to improve was to hit rock bottom. I really did want it to be better; I wanted it to rebuild. But that wouldn’t happen if it continued to believe it was a functioning agency with only minor problems.

The hearing room was considerably smaller than it appears on television, and when I walked in, it was almost completely full. A group of SEC staff members was sitting together, and right next to them was a large number of reporters. I’d brought with me hand-outs about whistleblowers from the Certified Fraud Examiners’ 2008 Report to the Nation that I wanted to distribute to the media so that they would learn about the tremendous value that whistleblowers bring to law enforcement. I walked across the room, right past the SEC employees, and started chatting with those journalists. As I handed out the Certified Fraud Examiners report, I told them, just loudly enough to make sure the SEC staffers heard me, “You should read this. It’s not in my written testimony but I’m going to refer to it. There are a lot of important statistics about whistleblowers in here.”

Bill Zucker, another McCarter & English attorney, was sitting with Pat Burns and Jeb White of Taxpayers Against Fraud near the SEC staff section. I stopped in front of them and told a few bad jokes, hoping to send a message to the SEC that I wasn’t the slightest bit nervous and that they were about to have a very bad day. I remember asking Pat Burns, “Do I have any blood on my lips? I had raw meat for breakfast. I’m in a bloodthirsty mood.” The SEC staffers were listening intently, and several of them started texting—but none of them were laughing.

Just before we began the session, the ranking Republican member, Scott Garrett from New Jersey, walked up to the witness table and introduced himself to me and then said the most astonishing thing: “I just wanted to shake your hand and thank you for appearing before this subcommittee. I realize that no one would listen to you, but I want to assure you that we’re here to listen and learn. Maybe the Democrats are right; maybe we do need to change the regulations.”

Maybe the Democrats were right? Who knew that Bernie Madoff was so awful he could even bring the Democrats and Republicans together?

In Chairman Paul Kanjorski’s opening statement, he explained, “We are using the largest known instance of securities fraud as a case study to guide the work of the Financial Services Committee in reshaping and reforming our nation’s financial services regulatory system. We preside in a crucial moment in our history, and our work ... will influence the securities industry for generations to come.

“Congress last undertook a wholesale rewrite of these laws in the wake of the Great Depression.... The world, however, has now changed and the motor is broken beyond repair. We therefore need to invent a new engine ....”

I began my opening statement by offering my sympathy to Bernie Madoff’s victims. For the first time I acknowledged Neil, Frank, and