Harry Markopolos, the crotchety genius-hero from Boston who blew the whistle on Bernie Madoff to the SEC years ago to no avail, is testifying in front of Congress right now. You can watch it live on MSNBC. He’s much more articulate than we expected, though he kind of has the exact same voice as Kenneth the Page from 30 Rock. Everyone is basically in awe of him. It’s a lovefest. After the jump, the highlights so far.
• Markopolos reams the SEC, calling it “captive to the industry it regulates,” adds that it “roars like a lion and bites like a flea.” Also: “Unfortunately, the SEC staff lacks the financial expertise” to investigate frauds. “A fraud that should have been stopped at $7 billion in 2000 has now grown to $50 billion.” SNAP.
• Someone asks him if he thinks there are any more “mini-Madoffs” out there. “I plan on turning in a one-billion-dollar mini-Madoff to the SEC tomorrow,” he says. “I hope they will listen to me this time.” Chuckles ensue.
• He also says that Madoff didn’t act alone. “He had a lot of help,” he said. “A robust information-technology business and people taking in money and sending out money.” He also knows of twelve other feeder funds that have not come forward yet.
• Oh, the paper that dropped the ball on reporting the story when Markopolos came to them was the Journal! Markopolos says senior editors there “respected and feared Madoff” and blocked a reporter from doing the story.
• “In Wall Street there is a code of silence, and when you live in a glass house you do not throw stones.” Code of Silence. Some douchebag in Hollywood is writing that down right now.
• “I think we should get this straight: Is it Mark-O-POLE-us or MarkoPULL-us?” Representative Jackie Speier asks. “I answer to both,” he says, without cracking a smile. Then she calls him a “modern Greek hero.” UGH. Then she very nicely asks him why he used gloves when handling Madoff’s documents, as he has said he did. “Isn’t that kind of paranoid?” He replies that an organization that big was sure to have mob and drug-cartel ties (!) and he feared that if they found out about him, “I would not be long for this world.” Speier reads back his sharp indictment of the SEC’s New York Branch Chief Meaghan Cheung and says, “She should be fired.” Markopolos agrees, but says she’s already resigned, so it’s “too late.”
• Someone (we missed who because the stupid player jammed) comes on for a klatch about Bernie Madoff’s living conditions at the moment. Markopolos calls it, “Penthouse arrest … He’s living a life of luxury,” he says, adding, “He does have serious complaints. He’s not allowed to go out for his nosh.” A joke! Bless him.
• Feeder funds like Walter Noel’s Fairfield Greenwich should be looked at because they “turned a blind eye” to red flags.
• Markopolos: “Right now, the SEC is 3,500 chickens; we need to put some foxes in there.” This man loves a metaphor.
• But then, five minutes later: “Clearly the SEC is not out there guarding the henhouse.” Dude, we love you, but are they the hens, or guarding the hens?
• Someone asks who should play him in the movie. Markopolos says it “should be a Red Sox fan.” We hate to say this, but he’s kind of David Schwimmer-y. Wait: Why was this brought up? Is this a hearing or is this a hearing?
• “I give the SEC an A+ for incompetence, and FINRA an A+ for corruption.” That’s more like it.
• Gary Ackerman goes there. We paraphrase: “Can we blame the investors for being stupid on this?” Markopolos (also paraphrased): “No.”
• Again with the Red Sox (and the SEC) “If you flew the entire SEC staff to Fenway Park, they wouldn’t be able to find first base.” HIGH FIVE.
• Subcommittee chair Paul Kanjorski thanks him in a really heartfelt way, adding that they were “grateful” to hear from him and that everyone looked forward to working with him in the future. It was kind of moving. We teared a little.
Markopolos Testimony [MSNBC]
Markopolos’ Testimony [WSJ]
Earlier: The Amazing Harry Markopolos
