I watched Markopolos testify tody in the Congressional Hearings on the Madoff Ponzi Scheme and then as much as I could tolerate of the S.E.C. Officials that followed him as I could tolerate [which wasn’t a lot]. Linda Thomsen, Securities and Exchange Commission Enforcement Director, stood out as the paradigm for the kind of bureaucrat that everyone hates. She talked down to the Congressmen; held her nose high in the air; and probably should’ve either never been hired or fired a long time ago. She took the position that not catching Madoff even though Markopolos handed the the case on a silver platter repeatedly wasn’t really their fault. Listening to her reminded me of a few people I’ve met in State systems or the Federal V.A. Hospital system who were more invested in the rules and regulations of the system that what the system was intended to do.
When I first watched Markopolos, I was a bit amazed at how blistering he was about the S.E.C., thinking he was a hero, but kind of out of control. After trying to listen to the S.E.C. people, I decided Markopolos was fine, and that his consistent venom was justified. He actually risked his life and reputation trying to get them to see that Bernie Madoff was a charlatan extroidinaire. Listening to the S.E.C. types was as bad as those people from the DoJ. I didn’t have the impression that they were partisan or conservative ideologues. I thought they were just singularly remiss in even knowing what they are tasked to do. Markopolos suggested repeatedly that the upper end of the S.E.C. be replaced. After listening today, I agree.
But there was something else that bothered me about the Hearing. Markopolos was suggesting that the S.E.C. hire people who were grey headed or bald, meaning experienced. He added [paraphrasing], "By their fifties, they will have made more money than they could possibly spend, and so…" Then he talked about young S.E.C. people who left and went into the private sector where they could make huge amounts of money. I can’t recall all the ways he and others said it, but it was clear that the expectation of people was to make large amounts of money in the "industry." He talked about "incentivizing" regulators by paying them big "bounties" for big cases to get them to take them on and press their superiors on their cases. He also said that the S.E.C. didn’t have the expertise to police the complex financial instruments used today. He likewise suggested that there are lots of "gaps" in regulation where the "fraudsters" hang out. He described the white color criminal as much more dangerous that a bank robber. He said that people on Wall Street don’t turn others in because if you turn people in, you might get turned in yourself.
I didn’t hear Markopolos’ testimony, but I did hear on NPR that he said that he knew after 5 minutes that Madoff was operating a ponzi scam — because his profile graph was a straight 45 degree angle. it didn’t have the ups and downs that always occur in an honest investment plan.
What I did hear was a congressman questioning Thomsen and ? Vollner, the lawyer for SEC. The congressman himself got so angry at their stonewalling that he was shouting and interrupting them. But you could see why he became infuriated, just in the 5 minutes I watched.
Wouldn’t it be nice if President Obama appointed Markospolo to job that would help regulate these crooks. This would send a message that might reverberate to other agencies, that this administration values honesty and openess. I find it kind of funny that his name Markopolo is so close in spelling to the childrens swimming pool tag game marco polo.
Does Linda Thomsen still have a job and if so, why?
[…] 2009 After watching the testimony of Harry Markopolos in the Madoff Hearing, I commented [cess pool…]: I watched Markopolos testify tody in the Congressional Hearings on the Madoff Ponzi Scheme and […]