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"Abject Failure:" Madoff Whistleblower Slams SEC

Posted Feb 04, 2009 05:03pm EST by Aaron Task in Newsmakers, Banking
Related: ^dji, ^gspc, ^IXIC, SPY, DIA, QQQQ, XLF
Harry Markopolos finally got his day in the sun Wednesday, after nearly 10 years of wandering in the financial wilderness, trying in vain to get someone (anyone) to listen to his warnings about Bernie Madoff.

Testifying before the House Financial Services Committee, the would-be whistleblower blistered the SEC, Finra and other regulators for their "abject failure" to stop Madoff, "even when a multi-billion dollar case [was] handed to them on a silver platter."

For those just tuning in (or who've been out to lunch), in mid-December Bernie Madoff admitted to running a $50 billion Ponzi scheme, of which only $950 million has been recovered so far, according to the trustee liquidating the firm.

Starting in early 2000, Markopolos tried numerous time to alert regulators to the fraud, which he and a team painstakingly uncovered through its undercover investigation of public records related to Madoff's firm and interviews with its feeder funds.

Speaking of those feeder funds, "we identified 14 feeder funds [in Europe], of which only two have come public," Markopolos testified. "There are 12 more out there lying low in the weeds in Europe that you have not heard about yet."

In other words, the fallout from the Madoff scandal and Markopolos' previously thankless work isn't over.

What's your take? Sound off in our comments section below.

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