Wall Street Knew Madoff was a Fraud

An Excerpt from 'No One Would Listen: A True Financial Thriller'


By Harry Markopolos

2010-MarchApril-Markopolos Excerpt-Book Jacket 
In Harry Markopolos’ new book, “No One Would Listen: A True Financial Thriller,” he writes about how he and his investigative team uncovered Bernard Madoff’s $65 billion Ponzi scheme years before it fell apart.

Markopolos, then a quantitative analyst (a “quant” as he calls himself) for Rampart Investment Management Company in Boston, Mass., writes how he slid into the investigation after Frank Casey, a marketing representative, asked Markopolos to “reverse engineer” Madoff’s strategy so they could market a product that would deliver similar returns.

Markopolos writes that when Casey handed him copies of the revenue stream in 1999, “I knew immediately the numbers made no sense. … At the bottom of the page a chart of his return stream rose steadily at a 45-degree angle, which simply doesn’t exist in finance. Within five minutes I told Frank, ‘There’s no way this is real. This is bogus.’”

In May 2000, he gave evidence against Madoff to the Securities and Exchange Commission (SEC), but the SEC never satisfactorily investigated the scheme.

“Five times I reported my concerns [to the SEC], and no one would listen until it was far too late.”

In this excerpt, Markopolos writes how he, Casey, and Neil Chelo, another Rampart quant, began chasing Madoff. (Michael Ockrant, an investigative reporter, later joined the team.)


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