Street Cred: Harry Markopolos Edition

While the full details of Bernie Madoff's scam is coming to light, it is clear that warning signs were overlooked by regulators. Perhaps the next iteration of the SEC will evolve to the point they take into account the surveillance activities of people who actually have a clue - daily participants in the markets.

The Darwinian competition assures that money managers monitor peers closely, whether they reside in your style box, poach your employees or show up at the dog and pony shows as you market your products. And the best money managers dig up enough dirt on investment opportunities or competitors to move mountains, but often their findings are dismissed as jealousy, or worse.

Harry Markopolos was not leaving much to the imagination in 1999 when he fired off a letter to regulators:

"Madoff Securities is the world's largest Ponzi scheme."

That's was Harry Markopolos' conclusion in a 1999 letter to the Securities and Exchange Commission - an alarm that he sounded 10 years before Bernie Madoff was arrested for running just that. NY Post

But now Harry's stock is on the rise. Great work Harry, but who are you?

A fixture in Boston’s financial-services community and a past president of the Boston Security Analysts Society Inc., Markopolos worked from 1991 through 2004 at Rampart Investment Management Co. He ultimately assumed the title of chief investment officer at the Boston firm, which boasted roughly $10.8 billion in assets as recently as Sept. 30.

Markopolos has since worked as an independent financial fraud investigator, tracking cases on his own and working as a hired gun for institutional investors and others seeking forensic-accounting expertise. The payoff for those services can be huge, although it’s unclear to what degree Markopolos has personally benefited from the various incentive plans offered by government regulators and other fraud victims.

A graduate of Loyola College of Maryland and Boston College’s master of finance program, his presentations are often fast-paced, as is his style of speaking; Markopolos can be quick to reach into his weathered briefcase to unveil detailed charts and timelines that outline allegedly improper and occasionally illegal behavior.

“I’ve always been very impressed with Harry. He always asks some very good questions and can draw on some very interesting experiences,” said Parmelee Eastman, the president of Eastside Consulting and the local chapter head of the Society of Competitive Information Professionals. She said Markopolos has spoken to the group about economic espionage and legal means in acquiring information on companies and individuals. Boston Business Journal

Harry mighty not be a saint, exactly - financial incentives for whistleblowers drive some of his work, but those carrots seem to be more effective than the SEC’s stick.

Harry is laying low at the moment. This firestorm has got to be a little overwhelming, but I am sure we have not heard the last of him. Check out the best article, yet, on gumshoe Harry.

And if you are unhappy with your boss, or employer, give him a call. He is now a recruiter who specializes in “team liftouts”. With the Street looking like Dresden, circa 1945, BuySiders looking for greener pastures might want to consider their dwindling options.

And Harry might just be able to dig some up for them.
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Madoff had early skeptic in Boston gumshoe
Boston Business Journal

ALARM BELLS IN 1999 IGNORED
NY POST
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The content contained in this blog represents the opinions of underthecounter. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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