Harry Markopolos

The whistleblower who detected the alleged Bernard Madoff fraud nine years ago yesterday subjected the US Securities and Exchange Commission (SEC) to a devastating public attack.

Testifying to Congress, Harry Markopolos accused the US regulator of being scared of confronting big Wall Street investors and of being crippled by internal squabbling and incompetence. Mr Markopolos said that many banks and funds on Wall Street knew about Mr Madoff’s fraud before it was exposed but “those in glass houses don’t throw stones”.

The former Boston fund manager, who began his quest in 2000 to uncover what was to become the world’s biggest scam, said that the Madoff debacle was part of a pattern of incompetence by the SEC, which had allowed rating agencies to fuel the sub-prime crisis. He said that the SEC was so useless in policing Wall Street that “they roar like a mouse and fight like a flea”.

The whistleblower insisted that Mr Madoff did not act alone in constructing the alleged $50 billion (£35 billion) fraud, but that he had been aided by an army of colleagues within his investment business in Manhattan.

The SEC was asked to investigate Mr Madoff, but the regulators “could not be bothered because they had higher priorities”.

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Suzy Jagger in New York.

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Comment by Ron Cesek on March 12, 2009 at 7:24pm: Jail Time for Ruth?

Doesn't look like she would hold up very well . .

Comment by Ron Cesek on March 12, 2009 at 5:47pm: Madoff Pleads Guilty to Ponzi Scheme

After admitting to details of a huge fraud, disgraced financier Bernard Madoff is jailed until sentencing

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Comment by Ron Cesek on February 7, 2009 at 11:05am: We need to get President Obama to appoint Harry to replace "helicopter ben". Our banks and the credit bureau's are the real enemy of the American people. It's why a house built for $5000 dollars in 1948 is now supposedly worth $110,000. and your phoney ass credit score agencies have us all paying usury . .

Comment by pstamant on February 6, 2009 at 3:09pm: Everyone who helped Madoff, and I'm sure there are many, should be held accountable. I listened to the Markopolos testimony on the radio. He dragged the SEC, NASD and FINRA through the mud. He was brilliant.

Comment by Ron Cesek on February 6, 2009 at 12:10pm: Hey James

It's what I do, watch video's about stuff. I found a site yesterday putting video's on the web that are phoney. I called him on it and he said "prove it ". Bad voice overs he says are sync problems. The voice isn't the same . . and I read lips

Comment by truth on February 5, 2009 at 9:02pm: David Sirota on yesterday's hearing about Bernie Madoff:

At a contentious Financial Services Committee hearing today about the failure of the Securities and Exchange Commission to prevent the Bernie Madoff scandal, the SEC's General Counsel cited executive privilege as reason that he and the SEC's enforcement branch were refusing to answer congressional inquiries. You can watch the video here - the executive privilege issue comes at about 5 minutes and 15 seconds into the clip.

As you'll see, SEC officials refuse to answer the committee's basic questions about the Madoff scandal, and the agency's acting general counsel, Andy Vollmer (a Bush holdover and maxed-out donor to John McCain's presidential c...) explicitly cites executive privilege as his legal rationale for refusing to provide basic information to federal lawmakers.

Congress has a constitutional obligation to engage in basic fact finding, both in order to legislate reforms at the SEC and to publicly expose how our economy was destroyed by sharks like Madoff. Now, Bush holdovers at the SEC are using executive powers - powers that are now President Obama's - to prevent Democratic lawmakers from doing their job.