Harry Markopolos, the whistleblower behind Bernie Madoff's Ponzi scheme, told the Securities and Exchanges Commission a decade ago how Madoff was breaking rules. He said the SEC was too scared to act on Madoff.
Markopolos gave his
testimony before the House Financial Services subcommittee and told them the damages from the Madoff scandal could have been minimized if the SEC acted on his findings a decade ago.
Markopolos claimed he provided credible allegations of fraud about Madoff’s operations to SEC a decade ago but they didn’t act on the tip. Since the SEC failed to act on Madoff, Markopolos was scared that he may be silenced.
He
told the committee that SEC acts only on small players. He alleged that the SEC “
roars like a lion and bites like a flea and is busy protecting the big financial predators from investors,”
Markopolos pointed at the SEC officials, who were also at the hearing. The SEC officials will testify next before the committee.
He also blamed SEC’s self-policing organization, the Financial Industry Regulatory Authority and called them very corrupt.
The House Financials Services committee is investigating why the SEC didn't discover Madoff’s $50 billion Ponzi scheme earlier.
Markopoulos said if he hadn’t come forward, the SEC would have remained silent and Madoff could have swindled $100 billion minimum. He said it took only five minutes for him to see that Madoff was a fraud and wondered why the SEC ignored the scandal for a decade.
