Madoff Whistleblower No-Show At Hearing

By: Christine Lagorio
Topics: In The News

(AP Photo/Seth Wenig)

While Bernard Madoff, the financier accused of running a $50 billion Ponzi scheme, was in a New York courtroom Monday answering to prosecutors, lawmakers in Washington held their first hearing on Madoff's investment scandal.

Democratic lawmakers charged that the Securities and Exchange Commission had "failed miserably" in ignoring warnings that could have uncovered wrongdoing years ago.

But as CBS News investigative correspondent Sharyl Attkisson reports on the CBS Evening News, a crucial witness in helping determine how Madoff's scheme evaded regulators was a no-show: whistleblower Harry Markopolos.

He agreed to testify at first, but ended up telling Congress he was too physically worn down and needs more time.

Markopolos, A derivatives expert, first alerted officials nearly 10 years ago about what he saw as Madoff's scam. In 2005 he sent this 19-page report to the SEC titled "the World's Largest Hedge Fund is a Fraud..." concluding it was "highly likely" that "Madoff Securities is the world's largest Ponzi scheme." Using mathematical models and charts, Markopolos outlined 29 "Red Flags" in a virtual blueprint of how to investigate Madoff, calling his returns "too good to be true" and saying he worried about his "personal safety."

But where Markopolos saw Red Flags, professional regulators apparently found no problems, Attkisson reports.

"There were plenty of indications of problems going on, but somebody just didn't do their job," said Rep. Donald Manzullo, R-Ill.

1 Comment Have Your Say
Email Story Send to a Friend
Share This Tell Your Friends
Tweet This Tweet This
More Share It

Add a Comment


by tomquinn666 January 7, 2009 2:16 PM EST: Do you blame him for not showing up?

Whistleblowers in the past have been mercilessly pounded into the ground for coming forward. Look what happen to to that poor soul Sgt. Joseph Darby. Yah...never heard of him huh? He was the Abu Ghraib scandal whistleblower. This hero couldn''t even come back to his hometown.

If people expect FUTURE whistleblowers to come forward, CURRENT whistleblowers who are "stuck in the mud" at their jobs enduring constant subtle reprisal, had to resign under duress, or were flat out fired, need to be given immediate relief. Such an action would send a loud message that would-be whistleblowers will not face retaliation.; Reply to this comment