Thread: Madoff whistleblower feared for his safety

Madoff whistleblower feared for his safety


Wed Feb 4, 2009 8:54am EST


WASHINGTON (Reuters) - Harry Markopolos, a former financial executive who tried to blow the whistle on accused swindler Bernard Madoff, will tell lawmakers he feared for the safety of his family when U.S. securities regulators ignored evidence in the case, the Wall Street Journal reported on Tuesday.

Markopolos is scheduled to testify on Wednesday at a House Financial Services subcommittee hearing that is examining how to reform U.S. financial services regulation and better police the markets.

"There was an abject failure by the regulatory agencies we entrust as our watchdog," according to a copy of Markopolos' testimony, which was posted on the Journal's website. Markopolos said he gave evidence to the SEC's office in Boston beginning in 2000 and resubmitted the evidence several times over a period of nine years.

"Because nothing was done, I became fearful for the safety of my family until the SEC finally acknowledged, after Madoff had been arrested, that it had received credible evidence of Madoff's Ponzi scheme several years earlier," the testimony said.

Markopolos and Madoff were Wall Street competitors when Markopolos was the former chief investment officer of Rampart Investment Management. Markopolos said he began looking at Madoff in 1996 after his boss at Rampart asked him to figure out how to match the returns of Madoff's firm. Markopolos' analysis convinced him it was impossible for Madoff to consistently outperform the markets.

(Reporting by Julie Vorman; Editing by Andre Grenon)

http://www.reuters.com/article/newsOne/ ... BQ20090204

Whistleblower Claims He Tipped 'WSJ' to Madoff Fraud, Paper Failed to Act

By E&P Staff

Published: February 04, 2009 1:10 PM ET


NEW YORK The key "whistleblower" in the Bernard Madoff fraud case, Harry Markopolos, testified today before Congress, alleging among other things that he approached the Wall Street Journal on the story more than three years ago, and the newspaper ultimately did nothing.

A Journal reporter in Washington, John Wilke, became a "friend" and was given the scoop, and wanted to pursue the case, but was never allowed by Journal editors, Markopolos claimed.

Calls to former Journal editors Paul Steiger and Marcus Brauchli were not immediately returned.

Markopolos testified that Pat Burns, communications director at Taxpayers Against Fraud, "put me in contact with John Wilke, senior investigative reporter for the Wall Street Journal's Washington bureau. Mr. Wilke and I would become friends over the next three years.

"Unfortunately, as eager as Mr. Wilke was to investigate the Madoff story, it appears that the Wall Street Journal's editors never gave him approval to start investigating. As you will see from my extensive e-mail correspondence with him over the next several months, there were several points in time in which he was getting ready to book air travel to start the story and then would get called off at the last minute. I never determined if the senior editors at the Wall Street Journal failed to authorize this investigation."

Markopolos also said, "Unfortunately neither the Wall Street Journal nor SEC were inclined to even pick up a phone and dial any of the leads I provided to them."

Later, under questioning, Markopolos added that he believed "that senior editors of the Journal respected and feared Mr. Madoff" and wouldn't let Wilke "get on the plane" and meet with Madoff for questioning.

More, no doubt, TK.

http://www.editorandpublisher.com/eandp ... 1003938136