Sorry if this has already been posted. Harry Markopolous is an independent fraud investigator and derivatives expert who had first informed the SEC regarding Madoff back in 1999 and wrote them this letter in 2005: "The world's largest hedge fund is a fraud" Edited: The attachment is too big, so here is the link http://online.wsj.com/documents/Madoff_SECdocs_20081217.pdf
Read the doc first: pg 2. "However the hedge fund isn't organized as a hedge fund by Berndard Madoff(BM) yet it acts and trades exactly like one."
That is incredibly damning to the SEC. He handed the case to them, and told them how to check it out quickly. Wow, wow, wow
Yeah, I also like the part where he breaks down split strike conversion strategy on pg 5 and explains how it would be impossible to earn 16% returns on it, especially for a fund the size of Madoff's. hehe
What an incredible document. Thanks for posting. Harry Markopolous ... you da man! He should get a medal or something ... The most salient point here is just how difficult it is to bring negative information to the public's attention. Short-selling is an essential service in the market, but our systems and structure make it terribly difficult.
If anyone can find video of the entire congressional testimony from cspan it would be very much appreciated if you could post it a link. I honestly don't remember a time that I've ever described congressional testimony on CSPAN as absolutely AWESOME... but I thought it today was not only hysterical... it was absolutely AWESOME... now my girlfriend wants to see it but I can't seem to find video anywhere. Thanks in advance to anyone who can find it.
Here are a few vids. http://www.huffingtonpost.com/2009/02/04/harry-markopolos-madoff-w_n_163846.html
Didn't Congress look into the firing of SEC investigator Gary Aguirre on that Pequot insider trading thing? Don't recall if they ever got an answer on that one, but it looks like the SEC behavior is chronic.