No One Would Listen: A True Financial Thriller [Hardcover]

Harry Markopolos (Author)

Book Description

Publication Date: March 2, 2010

Bernie Madoff was a king of the financial world and a beloved philanthropist. But very few people knew that he was quietly running the largest hedge fund in the world, a fund that eventually spread to over forty nations and handled tens of billions of dollars. Harry Markopolos was a little-known number cruncher at a Boston equity derivatives firm analyzing investment products. A marketer for that firm, Frank Casey, handed Harry a prospectus outlining Madoff’s strategy and asked him to create a similar product. Harry sat down and looked at the numbers. The numbers didn’t add up. For the next ten years, the investigative team Markopolos recruited warned the government, the industry, and the financial press that the largest and most successful hedge fund in the industry was a total fraud and that the respected and admired Bernie Madoff was a crook. But no one would listen. This is the thrilling, complete story of the pursuit of the greatest financial criminal in history. The incredible investigation takes listeners inside the financial industry, revealing the never-before-told stories behind the headlines. No One Would Listen is the frighteningly true story of massive fraud, governmental incompetence, and criminal collusion that has changed thousands of lives forever—as well as the world’s financial system.

--This text refers to the Audio CD edition.

Editorial Reviews

Amazon.com Review

Harry Markopolos and his team of financial sleuths discuss first-hand how they cracked the Madoff Ponzi scheme

No One Would Listen is the exclusive story of the Harry Markopolos-lead investigation into Bernie Madoff and his $65 billion Ponzi scheme. While a lot has been written about Madoff's scam, few actually know how Markopolos and his team-affectionately called "The Fox Hounds" by Markopolos himself, uncovered what Madoff was doing years before this financial disaster reached its pinnacle. Unfortunately, no one listened, until the damage of the world's largest financial fraud ever was irreversible.

Since that time, Markopolos openly has testified and questioned the enforcement and fraud investigation capabilities of the Securities and Exchange Commission (SEC), shared a sliver of this page-turning story with 60 Minutes, and become perhaps the world's most visible and insightful whistleblower on fraud and conflicts of interest in financial markets.

Throughout the book, Markopolos and his Fox Hounds tell their first-hand story of investigating Madoff-with the help of bestselling author David Fisher. They explain how they discovered the fraud, and then how they provided credible and detailed evidence to major newspapers and the Securities and Exchange Commission (SEC) many times between 2000 and 2008, only to have his warnings ignored repeatedly by the SEC.

• Provides a firsthand account of how Markopolos uncovered Madoff's scam years before it actually fell apart
• Discusses how the SEC missed the red flags raised by Markopolos
• Describes how Madoff was enabled by investors and fiduciaries alike
• The only book to tell the story of Madoff's scam and the SEC's failings by those who saw both first hand

Despite repeated written and verbal warnings to the SEC by Harry Markopolos, Bernie Madoff was allowed to continue his operations. No One Would Listen paints a vivid portrait of Markopolos and his determined team of financial sleuths, and what impact they will have on financial markets and financial regulation for decades to come.

A Timeline of a Take-Down
Amazon-exclusive content from author Harry Markopolos

How long did it take to uncover and expose a $40 billion crook? Ten years.

1998-1999
• 1998: My Firm “discovers” Bernie Madoff
• Late 1999: I am asked to reverse engineer Madoff’s returns

2000
• I knew he was a fraudster in 5 minutes
• May: Submission to SEC Boston Regional Office’s Director of Enforcement with 12 Red Flags

2001
• January: Team Member Frank Casey recruits MAR Hedge investigative journalist Michael Ocrant onto the team during a chance meeting in Barcelona, Spain
• March: My 2nd SEC Submission on how I think Madoff is running the scheme and his investment process
• I offer to go undercover to assist the SEC
• Apr: Michael Ocrant interviews Madoff
• May: MAR Hedge publishes Madoff expose, “Madoff Tops Charts; skeptics ask how”; Barron’s publishes, “Don’t Ask, Don’t Tell: Bernie Madoff is so secretive, he even asks investors to keep mum”

2002
• Jun: Key trip to UK, France & Switzerland; met with 20 Fund of Funds & Private Client Banks: 14 have Madoff and report “special access to Madoff”; two have admitted Madoff losses – Dexia Asset Management and Fix Family Office; 12 have not admitted Madoff losses and all 12 were turned into SEC Chairwoman on Feb. 5, 2009; off-Shore funds attract three types of investors who won’t report losses or file SIPC claims with the US government

2003-2004
• E-mail records of investigation lost; attempting to recover data from non-functioning hard drives

2005
• Jun: Frank Casey discovers Madoff attempting to borrow money from European banks (first sign that Madoff scheme is in trouble)
• Oct: Boston SEC’s Ed Manion arranges for 3rd SEC Submission
• Oct: Meeting with Boston SEC Branch Chief Mike Garrity, who quickly investigates, finds irregularities, and forwards my submission to SEC’s New York Office
• Nov: Boston Whistleblower calls NYC Branch Chief Meaghen Cheung and reveals his identity
• Nov: 29 Red Flags submitted
• Dec: I doubt NYC SEC’s ability, fear for my life, and contact Wall Street Journal and go to local law enforcement for protection

2006
• Jan: Integral Partners’ $40 million derivatives Ponzi Scheme goes to trial five years and five months after discovery, causing us to further doubt SEC competence
• Sep: Chicago Board Options Exchange VP tells me that several OEX option traders also think Madoff is a fraudster; if SEC had called the CBOE’s marketing office, they would have cooperated

2007
• Feb 28: Neil Chelo obtains a Madoff portfolio which shows zero ability to earn a return
• Jun: Casey obtains Wickford Fund LP prospectus showing Madoff is short of cash and offering a 3:1 leverage via bank loans, another clear warning sign that Madoff is running short of cash
• Jul: Chelo obtains Fairfield Greenwich Sentry LP financial statements for 2004 – 2006 and discovers three year-end audits with three different auditors in three different countries!
• Aug: Chelo conducts a 45 minute telephone interview with Fairfield Greenwich’s head of risk management; hedge funds all lose money except for Madoff!

2008
• Apr 2: Undelivered e-mail to Sokobin, SEC’s Director of Risk Assessment, entitled, “$30 Billion Equity Derivatives Hedge Fund Fraud in New York”
• Dec 11: Madoff runs out of money, turns himself in
• Dec 12: SEC insider calls me and warns “watch your back, Operation Cover-up has begun.”

2009
• Feb 4: My U.S. House testimony followed by SEC’s senior staff and FINRA acting CEO
• Sep 4: 477-page SEC IG Report on the Madoff Fiasco released
• Sep 10: I testify before US Senate Banking Committee with SEC IG

From Publishers Weekly

Starred Review. Markopolos, the whistleblower who filed five unheeded complaints against Ponzi king Bernie Madoff over nine years, has produced an astonishing true-life whodunit set amidst the personalities, plots, and international intrigue of Wall Street. Having collected damning information on money manager Madoff-the respected co-founder of NASDAQ who ran the largest financial scam in history-since 1999, Markopolos's work as a chartered financial analyst and certified fraud examiner, aided by an industry journalist and two colleagues from his days as a derivatives portfolio manager, lays bare the Security and Exchange Commission (SEC) as a tragically inept regulating agency that "didn't give a rat's ass about protecting investors," and seemed to consider Madoff "just another guy cutting some corners." Realizing he had not one but two powerful opponents-"Madoff and this nonfunctioning agency"-Markopolos refused to give up, despite fearing for his life and his family; accordingly, he transmits his team's determination and fascination in contagious detail. The hows and whys of Madoff's eventual arrest, Markopolos's subsequent appearances before Congress, and the carnival of press coverage makes a satisfying conclusion to this strange epic; Markopolos also includes complete documentation of his formal submissions to the SEC, plus his recommendations for much-needed reform at the agency.

See all Editorial Reviews

Product Details

• Hardcover: 376 pages
• Publisher: Wiley; 1 edition (March 2, 2010)
• Language: English
• ISBN-10: 0470553731
• ISBN-13: 978-0470553732
• Product Dimensions: 9.2 x 6.6 x 1.2 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.1 out of 5 stars  See all reviews (159 customer reviews)
• Amazon Best Sellers Rank: #69,713 in Books (See Top 100 in Books)

More About the Author

Harry Markopolos attended high school at Cathedral Prep in his hometown of Erie, Pennsylvania. He received his Bachelor of Arts degree in business administration from Loyola University of Maryland and then went on to Boston College for his Master of Science in finance degree. He received a reserve commission as a second lieutenant, Infantry, in the U.S. Army and is a graduate of several Army postgraduate schools, including the Infantry Officers ' Basic and Advanced Courses, the Civil Affairs Officers ' Advanced Course, and the U.S. Army Command & General Staff College. Mr. Markopolos has commanded troops at every rank from second lieutenant to major during 17 years of part-time service in the Maryland Army National Guard and Army Reserve. He earned his Chartered Financial Analyst designation in 1996 and his Certified Fraud Examiner designation in 2008. From 2002 to 2003 he served as president and CEO of the 4,000-member Boston Security Analysts Society. He has also held board seats on the Boston chapters of both the Global Association of Risk Professionals and the Quantitative Work Alliance for Applied Finance, Education and Wisdom (QWAFAFEW), a quantitative finance lecture group. He was assistant controller, assistant manager, store manager, and district manager for his family's chain of 12 Arthur Treacher 's Fish & Chips restaurants before joining Makefield Securities in 1987. In 1988 he joined Darien Capital Management in Greenwich, Connecticut, as an assistant portfolio manager, leaving to become an equity derivatives portfolio manager at Rampart Investment Management Company in Boston, Massachusetts. In 2002 he was promoted to Chief Investment Officer but decided to leave the industry in 2004 to pursue fraud investigations full-time against Fortune 500 companies in the financial services and health care industries. He brings fraud cases to the U.S. Department of Justice, Internal Revenue Service, and various state attorney generals under existing whistleblower programs.
The Madoff investigation, which he started in early 2000, was his first financial fraud case. He's been hooked ever since.

Customer Reviews

Most Helpful Customer Reviews

233 of 242 people found the following review helpful:

5.0 out of 5 stars A true David and Goliath story, March 6, 2010

By 

Accounting Junkie (New York, NY) - See all my reviews

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This review is from: No One Would Listen: A True Financial Thriller (Hardcover)

Although I was not an investor, I have been intrigued by the Madoff scandal since it exploded in December 2008. Ever since then, I have spent hours poring over articles written in the press and documents released by the government and watched (and rewatched) all the hearings on this massive fraud. I even attended one of Harry Markopolos' speaking events to make sure that my television screen did not conjure up such a noble public servant. Of course, it is only appropriate that I would have a copy of "No One Would Listen" in my hands on the first day of its release. Admittedly, I expected the book to be more or less a summary of everything I have learned thus far - I was very wrong. "No One Would Listen, " a true David and Goliath story, is one of the most riveting nonfiction I have ever read.

In the book, young innocent David is portrayed as a "wildly eccentric quant" from Boston named Harry Markopolos who tried to defend his country from the nine feet tall Philistine giant Goliath, portrayed as Bernie Madoff. King Saul of Israel and his army (the SEC) were terrified of Goliath. "No One Would Listen" is a 10-year firsthand account of how Harry and his three friends tried to warn the government, the industry, and the press that the founder of the most successful broker-dealers in the financial industry was actually the biggest crook in history. Unfortunately, "No One Would Listen" does not have the same happy ending as the biblical David v. Goliath battle.

For the past few days, I have been reading reviews on the book and found a lot of derogatory comments about Harry's character and his book. I have to wonder to myself if these reporters read the same book that I did and why they would want to tag their name with such unsubstantiated assertions. Before I continue on the book, I have to point out some false information printed by some media outlets. These book reviews only reconfirm the financial mediocrity in the press that Harry and his team had to deal with the past 10 years - that is why no one would listen.

First, we know that in its 73 years of existence, the SEC has a history of treating whistleblowers like dirt and has only paid 2 whistleblower bounties. One reward, as told in the book, was in the amount of $3,500. I'm sick and tired of people throwing that Harry only went to the SEC because he was looking for a bounty. He knew from the start that his chance of receiving a bounty was remote. Even if he did receive a bounty, is $3,500 worth hundreds of hours of investigative research while he was most likely making a comfortable 6-figure salary at his previous employment?

Second, some reporters claimed that the reason why no one would listen is because Harry is some sort of nut that rubbed the SEC the wrong way and that he was overly paranoid for fearing that Madoff may come after him. One only has to watch Harry's Feb. 4, 2009 testimony to Congress to confirm this man's articulate manner and brilliance. Do your research on his background, and you will see how aware people are of his talents and credibility. The reason why no one would listen is because the fraud was so unbelievable - Bernie Madoff was filthy rich, why would he need to steal? The second reason, as the world now knows, is due to the arrogance and investigative ineptitude of the SEC and the press. In addressing his fear for Madoff, why wouldn't he fear Madoff? People have killed for much less. There are pending investigations with the FBI undisclosed to the public. Why would the FBI announce to the bad guys that they're about to be investigated, unlike the SEC, who called Madoff to give him a heads up on the 2006 investigation.

Third, a major media outlet criticized how Harry had made a career of being "a professional whistleblower facilitator," turning corporate employees into spies when they should be reporting problems internally. After the collapse of Enron, the SEC was charged with reviewing incidents of financial statement fraud from 1997 to 2002. Of the 515 enforcement actions for financial reporting and disclosure fraud, charges were brought against 466 managers: 75 chairmen of the board, 111 CEOs, 111 presidents, 105 CFOs, 21 COOs, 16 CAOs, and 27 VPs of finance. You tell me how a lonely staff member at the bottom of the totem pole would come up against these big honchos.

Throughout the book, if I was not cracking up laughing at Harry's oddball sense of humor, I was pounding my fist from mortification at the horrors that Harry and his team had witnessed the past 10 years. "No One Would Listen" is a reflection of the culture of greed infected on Wall Street. One event that stuck to my mind was Neil Chelo's phone interview with the head of risk management at Fairfield Greenwich Sentry Fund in Chapter 7. I was completely appalled that he could not answer any of Neil's questions on how Madoff was getting his returns, why he was always holding T-bills at year end, and why the audits only show $160MM worth of T-bills on a $1.47BB portfolio. Where did the remaining $1.31BB go? This is the same egghead that manages the risk of a $7BB fund. It was absurd how he had the gall to follow up with Neil if he still wanted to invest with the fund even after Neil had called him out for an hour straight.

Another event that had me almost vomiting was regarding 20 market-timing scandals that Harry had worked on for 1.5 years and eventually presented to the SEC. The scandals cost investors $20BB, yet the SEC decided that they were done with market timing scandals so the crooks all walked away scotch-free. Keep in mind that this all happened after Peter Scannell already testified against the SEC on how the agency missed the market timing scandal at Putnam Investments even with his repeated warnings. Our tax dollars at work. And we wonder why our country is in the midst of economic meltdown today.

As Frank Casey pointed out, Mother Teresa did not work on Wall Street. Even so, the book details the sacrifices that Harry and his team went through to expose the evil man that is Bernie Madoff, even if it means losing money to a competitor or risk getting shot in the head. These four men are the rare gems in the financial industry. If more people like them exist, perhaps Wall Street would not be such a bad place.

Toward the end, Harry revealed the nature of some of the cases he has been working on the past few years and recommendations on how the SEC could improve. He is truly blessed - a self-taught fraud investigator accomplishing more for our country in five years than the entire SEC staff has done in decades. And for that, we owe him our gratitude.

Go get 'em, Harry.

99 of 104 people found the following review helpful:

5.0 out of 5 stars The definitive story, March 3, 2010

By 

N. Rothschild (New York, NY) - See all my reviews
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This review is from: No One Would Listen: A True Financial Thriller (Hardcover)

When the SEC was asleep at the wheel, Markopolos was there. It blew my mind when I read just how many times Markopolos tried to contact the SEC and the media, and so many times, he was ignored. To think of the money and the lives that could have been saved! When I wasn't baffled and educated by the contents of the book, I was laughing. Markopolos has managed to write a TRUE thriller with charm and humor. It comforts me to know that this book is out there, for all to read, and I hope it brings a lot of change to our financial watchdogs. Harry Markopolos is a hero.

65 of 68 people found the following review helpful:

5.0 out of 5 stars Well Written Account of Harry's Efforts, March 3, 2010

By 

J. Lyon "Jim Lyon, CFA" (Westlake Village, CA, US) - See all my reviews
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Amazon Verified Purchase

This review is from: No One Would Listen: A True Financial Thriller (Hardcover)

Excellent account of the efforts of Harry Markopolos and his team in uncovering Bernie Madoff's fraud and then trying to expose him and get the government to act. The book is well written and documents the the abysmal failures of an SEC relying too heavily on lawyers and accountants who lack the sophistication to understand how the investment industry works and the investment solutions the industry markets to investors.

Harry's account of when Noelle Frangipane, a member of the SEC's Inspector General's team investigating the SEC's failings, broke down and cried was indeed a particularly human moment and an account I'm glad Harry put in the book. There are people at the SEC who care. The agency clearly lacks investment professionals and people with investment industry operational experience. Lawyers and accountants have their role, but they are not trained as investment professionals.

Great read! Good job Harry!