No One Would Listen: A True Financial Thriller Harry Markopolos (the alpha prince and his bride full story free .TXT) 📖

of 16 percent with only seven monthly losses during the past 14 years? But if this person had heard of Bernie Madoff, among the questions I suggested were: Do you know who Bernie Madoff trades his over-the-counter OEX index options through? Have you ever seen the footprints of Bernie Madoff’s trades in the markets that you trade? How realistic do you consider Bernie Madoff’s performance numbers to be? Have you heard any stories about Bernie Madoff going to cash ahead of major market sell-offs? If so, how do you think he manages to sell ahead of the market?

In the world of numbers, it should take only a few pointed questions to figure out what’s real. If Wilke had asked these questions to several people on the list, any doubts he had about our Madoff claims would have been settled right there. As I had told the SEC, give me Madoff for five minutes and three questions and I could have put him away. Ironically, this was the same month that the Integral Investment Management hedge fund fraud went to trial five years after being discovered. That one hadn’t surprised me at all. Several years earlier Frank Casey had pitched the Rampart product I’d created to the Chicago Art Institute, and its directors had shown a lot of interest. At that time, they told Frank, they were heavily invested in a very successful Integral derivatives fund, so Frank had borrowed Integral’s PowerPoint presentation and asked me to take a look at it. After looking at it, I couldn’t figure out what the hell they were doing. Like Madoff, their strategy made no sense. Frank and I called a manager at Integral and claimed we were interested in investing. We asked him seven questions and he responded with seven totally wrong answers, making it obvious the whole thing was a fraud. Integral didn’t know the first thing about options. Integral was basically a much smaller Ponzi scheme than Madoff, but we were too deeply entrenched in Bernie to take on another fight. Its founder, Conrad Seghers, was convicted of violating the antifraud provisions of the securities laws and was barred from the investment industry.

But all it took to find out was asking seven questions on the telephone.

Wilke couldn’t make it to Boston in February because he was working on a major political story, as well as a report on alleged price fixing by Chinese vitamin supplement suppliers. In April he broke the story about Congressman Alan Mollohan, who, according to the Journal, set up several nonprofits in his West Virginia district and then helped those organizations obtain millions of dollars in congressional earmarks, while at the same time increasing his own personal wealth from about $500,000 to more than $6 million in four years. When it ran I sent a copy to the team, explaining, “John Wilke, the senior investigative reporter for the Wall Street Journal,published this cover story on Friday, which is why he is so late in getting to Boston. He said he’s coming up either late this week or late next week and that his next big cover story will be Madoff.

“John’s working on a drug scandal that likely gets into the WSJ next week but then he’s going to work on Madoff. John’s been covering the Lipitor scandal pretty heavily lately but he’s just doing maintenance follows as that investigation continues.”

When I spoke with John Wilke I still could hear his enthusiasm in his voice. Admittedly I was starting to get a little anxious, knowing that once this story was published I would no longer be in jeopardy, but when the finest investigative reporter in the business tells you he’s doing your story, there is no reason to doubt him.

He was still coming in May and June, but by this time I had started worrying. Was Madoff so big he had a line into the editors of the journal? If Wilke had turned down this story six months earlier I would have accepted it, but he hadn’t. He’d actively pursued it, and he had continued to assure me that he intended to pursue this story.

While this was being played out, whenever possible Mike Ocrant would urge a reporter he knew at the New York Times to pursue this and several other possible stories. Ocrant was no longer reporting at MARHedge, instead having joined Institutional Investor, a global publisher and conference operator, as director of alternative investment conferences. When Mike told this Times reporter about Madoff, she had responded with some mild interest. She’d read his story and asked a few pertinent questions. But every time he brought it up to her she replied that, just like Wilke, she was under pressure to finish another piece or was in the middle of another assignment or any one of the many other reasons she just didn’t have time to conduct an investigation.

In June, Ben Stein, the Barron’s financial writer and TV comedian, was the featured speaker at the Boston Security Analysts Society’s annual dinner. I had always admired him. I felt he was a lot smarter than the reporters in the finance world, and when he showed up at this dinner wearing a nice suit and yellow sneakers, my respect for him grew even more. I introduced myself to him at the cocktail party before the dinner, explaining I was investigating securities fraud cases and I had discovered several billion-dollar frauds. He seemed interested and we exchanged e-mail addresses. While I didn’t mention Madoff to him, I thought he’d be the perfect person to go to if the Journal didn’t work out. He already had his own soapbox and he was funny enough to be taken seriously.

The next day I sent him an e-mail. He responded. I followed up one more time, but still not mentioning Madoff. This time he didn’t respond, and I never heard from him again. I’m sure he has no idea how close he came to being able to break the Madoff story and save people