Markopolos Testimony — Transcript

Full transcript

1. 0:01as today's testimony will reveal my team
2. 0:04and I tried our best to get the SEC to
3. 0:06investigate and shut down the Mano Ponzi
4. 0:08scheme with repeated incredible warnings
5. 0:11to the SEC that started in May 2000 when
6. 0:15the manof Ponzi scheme was only A3 to7
7. 0:18billion fraud we knew then that we had
8. 0:21provided enough red flags and
9. 0:23mathematical proofs to the SEC for them
10. 0:26where they should have been able to shut
11. 0:28him down right then and there at under
12. 0:30$7 billion but unfortunately the SEC
13. 0:34staff lacks the financial expertise and
14. 0:37is incapable of understanding the
15. 0:39complex financial instruments being
16. 0:40traded in the 21st century in October
17. 0:442001 when manof was still in a 12 to20
18. 0:47billion range again we felt confident
19. 0:51that we had provided even more evidence
20. 0:52to the SEC such that he should have been
21. 0:55stopped at well under $20 billion and
22. 0:58again in November 2005
23. 1:00when Mr manop was at $30 billion 29 red
24. 1:03flags were handed to the SEC and yet
25. 1:06again they failed to properly
26. 1:08investigate and shut down Mr mof's
27. 1:11operation unfortunately as they didn't
28. 1:13respond to my written submissions in
29. 1:152000 2001 2005 2007 and 2008 here we are
30. 1:22today a fraud that should have been
31. 1:24stopped at under $7 billion in 2000 has
32. 1:26now grown to $50 billion in order to
33. 1:29comp departmentalized the damage if Mr
34. 1:31manof found out that we were tracking
35. 1:33him Mr Manoff was already facing life in
36. 1:36prison if he were caught so he' face
37. 1:38little to no downside to removing
38. 1:40whatever threat he felt we posed at
39. 1:42various points in time throughout these
40. 1:45past nine years each of us feared for
41. 1:47our lives each time any of us collected
42. 1:50information we took risks and
43. 1:52fortunately for us we were not
44. 1:54discovered sadly the SEC distrust anyone
45. 1:57with industry experience I am very
46. 1:59surprised that the SEC did not fire Mr
47. 2:01Manion for his constant pestering about
48. 2:03Mr matov the SEC to this day holds
49. 2:06against him the fact that he kept
50. 2:07bringing this case to hit their
51. 2:08attention and I believe he would be
52. 2:10fired if he ever went public and told
53. 2:12investors how strong an advocate he was
54. 2:14on their behalf since Mr mof's operation
55. 2:17was located in New York City the New
56. 2:19York regional office had jurisdiction in
57. 2:222000 Mr Manion warned me that relations
58. 2:25between the New York and Boston Regional
59. 2:26Offices was about as warm and friendly
60. 2:29as the y Red Sox rivalry and that New
61. 2:32York does not like to receive tips from
62. 2:33Boston trer words were never spoken
63. 2:37there was no centralized office of The
64. 2:38Whistleblower in Washington staff with
65. 2:40industry professionals who knew how to
66. 2:42determine if whistleblower complaints
67. 2:44being submitted were credible and a
68. 2:46sufficient quality to Merit immediate
69. 2:47investigation instead I had to go
70. 2:50through the Boston SEC regional office
71. 2:52which had to forward me to the New York
72. 2:53regional office unfortunately these two
73. 2:56offices did not get along and I wasn't
74. 2:59able to go go directly to the sec's
75. 3:01headquarters in Washington and have them
76. 3:02referee and Lead this entire process in
77. 3:05April 2008 I went to the sec's director
78. 3:08of risk assessment with this case and
79. 3:10got no response I told the SEC exactly
80. 3:13where to look providing them with a long
81. 3:16series of clear warnings that any
82. 3:18trained investment professional would
83. 3:19have immediately understood
84. 3:22inexplicably the never acted upon those
85. 3:25repeated in multiple warnings over a
86. 3:279-year time time span as my former
87. 3:29written testimony makes clear the SEC is
88. 3:32over lawyered has too few staff with
89. 3:35relevant industry experience and
90. 3:36professional credentials to fine fraud
91. 3:38even when a multi billion dollar case is
92. 3:41handed to them on a silver platter the
93. 3:43SEC is also captive to the industry it
94. 3:46regulates and it is afraid of bringing
95. 3:48big cases against the largest most
96. 3:50powerful firms Mr manof was one of the
97. 3:52most powerful men on Wall Street he
98. 3:54owned a prestigious brokerage firm he
99. 3:56and his brother held numerous top level
100. 3:58positions on the most influenced
101. 4:00industry Association boards clearly the
102. 4:03SEC was afraid of Mr mtof no one from
103. 4:05the SEC has Ste forward to admit
104. 4:07personal responsibility instead all
105. 4:10we've heard is one senior official after
106. 4:12another saying that they cannot comment
107. 4:14about the manof investigation because it
108. 4:16is ongoing telling us that they receive
109. 4:19thousands of tips each year and that
110. 4:20they have to conduct triage and can only
111. 4:22respond to the highest priority matters
112. 4:25I gift wrapped and delivered the largest
113. 4:26Ponzi scheme in history to them and
114. 4:28somehow they couldn't be bothered to
115. 4:30conduct a thorough and proper
116. 4:32investigation because they were too busy
117. 4:34on matters of higher priority if a $50
118. 4:37billion Ponzi scheme doesn't make the
119. 4:38sec's priority list then I want to know
120. 4:41who sets their priorities